Council Tax: Social Care Precept
 - Question

Baroness Barker: To ask Her Majesty’s Government how much revenue they estimate will be generated in 2016–17 by local authorities using their power to increase council tax to offset the cost of social care.

Viscount Younger of Leckie: My Lords, on 31 March 2016 the department published national statistics on council tax levels in England for 2016-17. This reported local authorities’ estimates that they would receive a total of £381.8 million in receipts for the adult social care precept in that financial year. One hundred and forty-four of 152 eligible councils chose to set the precept of up to 2%. The precept will raise up to £2 billion by 2019-20.

Baroness Barker: I thank the Minister for that Answer. This policy already favours those local authorities which have higher-value properties. Eight councils have decided not to raise the precept, so the Chancellor’s projection that this policy will generate an extra £2 billion between now and 2020 is already unravelling. Will the Government increase the better care fund for this financial year so that people in poor communities will not lose services and end up having to turn to the NHS?

Viscount Younger of Leckie: My Lords, the Government recognise that the local government settlement is challenging. Consistent with our approach to give local authorities more control over their own destiny, we are giving important new flexibilities which reflect concerns that councils have shared with us. We recognise that some councils with a low council tax base in the poorer communities will not benefit as much. That is why the better care fund, which the noble Baroness has mentioned, on top of the adult social care precept, will provide £1.5 billion by 2020. With this, importantly, average spending power per dwelling for the 10% most deprived authorities is around 23% higher than in the least deprived authorities.

Lord Beecham: My Lords, I declare my local government interests. In Newcastle, which is suffering a cumulative loss from government cuts and cost pressures, not least in relation to social care amounting to £332 million, a 2% social care precept will raise £1.7 million. The welcome increase in the national minimum wage, which is not of course the same as the national living wage, will cost £4.5 million a year, such that over the next three years there will be a shortfall of £9.5 million. Given that the 2% increase benefits councils in better-off areas, with more people in the  higher tax bands and less need for supporting social care, when will the Government recognise that it is necessary to ensure that the funding of social care ought to reflect both need and the relative yield of local taxation?

Viscount Younger of Leckie: My Lords, I have already addressed the important question of proportionality, which the noble Baroness raised. The Government have put in place a total package of £3.5 billion which will be available by 2019-20. That package is greater than the local authority associations’ £2.9 billion estimate, set out in their spending review submission.

Baroness Shephard of Northwold: My Lords, my noble friend described the situation for local authorities as challenging, which indeed it is. What encouragement are the Government giving at local level to social services and health departments to merge their services? My noble friend will know that an extremely successful initiative along these lines has been going for at least a decade in Torquay. I feel, and I think that many Members of this House with great local experience will agree, that encouragement for such a merger would help to make the best of scarce resources.

Viscount Younger of Leckie: My noble friend is right that councils have worked very hard over the past five years to deliver a better deal for local taxpayers, and that the important thing is to keep council tax down while satisfaction with local public services must be maintained. However, further savings can be made when councils account for one-quarter of all public spending. There is much that can be done that is appropriate in terms of merging services, as my noble friend has said.

Baroness Armstrong of Hill Top: My Lords, will the Minister reconsider dealing with this simply with a national perspective? Following Parliamentary Questions that I have tabled, if he looks at the north-east as a whole, he will see that not only is it that not a single local authority would raise through the 2% precept enough to cover the minimum wage for the number of people who are publicly dependent for social care, but the better care fund will not be anything like sufficient to supplement the 2%. We have incredibly unequal and unfair distribution across the country. Will he commit to ensuring that the Government address this issue urgently so that vulnerable people are not put at risk by this global policy that does not address separate need, particularly in the north-east?

Viscount Younger of Leckie: My Lords, I think I have already made it clear that the Government are taking action. For example, local council tax support is also available to help the vulnerable, and £3.7 billion was provided for that support in each of the last three years. I should also say that, looking particularly at certain groups such as the disabled, we have provided £500 million. That will be available by 2019-20 over those years for the disabled facilities grant, which is more than double what is spent at the moment.

Baroness Thornhill: There is concern across the House about the crisis in social care. The spending review stated that the Government have,
“a preferred option for savings of at least £800 million”—
from the new homes bonus—
“which can be used for social care”.
Will the Minister provide reassurance that if such savings are not met, that will not impact on the already promised £1.5 billion for social care by 2019-20? Or is it perhaps time that the Government let local authorities make their own decisions about spending in their own areas, and that we got rid of caps and referenda so that local authorities could raise the money for their own needs?

Viscount Younger of Leckie: We have consistently made it clear that we believe it is right to devolve responsibility down to the local level, to allow people to make their own decisions and for authorities to decide themselves what their needs are. That is a very important point for devolvement.

Baroness Buscombe: Will my noble friend accept that care delivered to the home relies to a large extent on the private sector, and that more and more companies in the private sector that have been delivering this care are now finding it completely unviable to continue? In that case, as the noble Baroness who asked the Question in the first place has suggested, it will create much more pressure on the already very stretched NHS.

Viscount Younger of Leckie: My noble friend makes an important point. It is true that we are very aware of the increased need over the coming years, not just the next five but the next 20 or 30, to look after our older people. One of the issues is to aim to allow people to live independently and a lot of resources are going into helping with that, which takes some of the pressure off the NHS.

Scotland Act 2016
 - Question

Lord Steel of Aikwood: To ask Her Majesty’s Government what steps they have taken to co-ordinate the implementation of the Scotland Act 2016 with the Scottish Government.

Lord Dunlop: The joint ministerial working group on welfare and the Joint Exchequer Committee will oversee the implementation of welfare and tax powers, and a cross-Whitehall programme board has been established to oversee implementation of the Scotland Act. Senior officials from the Scottish and UK Governments meet regularly to identify and resolve issues and, building on the successful implementation of the 2012 Act, I am confident that both Governments will work constructively together to implement these historic new powers.

Lord Steel of Aikwood: My Lords, I am grateful to the Minister. However, is he aware that in last week’s debate on HS2 only one Peer—my noble friend Lord Glasgow—spoke of the need to extend that line as far as Scotland, and that the same week the First Minister of Scotland announced a feasibility study to extend the successful Borders Railway further south? What, then, are the chances of the two Governments working together to make sure that Scotland gets a modern railway system?

Lord Dunlop: In all issues the two Governments will seek to work constructively. There was a specific review to see how passengers who travelled to Scotland could get the benefits of HS2—that is an example of how the two Governments have been working together.

Lord Forsyth of Drumlean: My Lords, does my noble friend agree that the Scotland Act 2016 leaves the power to call a second referendum on independence in Scotland here at Westminster and not in Scotland, and that it is utterly irresponsible for any unionist to argue that a vote to leave the European Union would justify a second referendum when the vast majority of people in Scotland regard this matter as now settled?

Lord Dunlop: I very much agree with my noble friend. The people of Scotland voted very clearly and decisively in 2014 to remain part of the United Kingdom, and at the time Nicola Sturgeon, now First Minister of Scotland, said that this was a “once in a generation” issue. It is incumbent on the SNP to respect the decision that the people of Scotland took and to focus on jobs, prosperity and high-quality public services in Scotland.

Lord Purvis of Tweed: The Scotland Act transfers very considerable income tax powers across all bands to the Scottish Parliament. Is the noble Lord aware that the Scottish National Party has now abandoned its long-held policy to restore the 50p additional rate because it anticipates that 7% of additional ratepayers in Scotland would configure their tax affairs to avoid paying taxation in Scotland? What are the Government doing to ensure that there is no prospect of tax avoidance within the UK?

Lord Dunlop: HMRC is very focused on tax avoidance. The passage of the Scotland Act 2016 has meant that the debate that is going on for the Holyrood elections is about not what new powers should come to Scotland but how those powers are used. Tax is absolutely central to that, and that is a good and healthy development of the debate in Scotland.

Lord McConnell of Glenscorrodale: My Lords, does the Minister agree that the existence of this latest Scotland Act, which devolves significant further powers to Scotland and therefore fundamentally changes much of the governance of Britain, should instigate a serious review of the way in which central government governs the whole country—the four nations of this country? Perhaps in particular the future of the territorial Secretaries of State should be looked at seriously, as surely now, with these further devolved powers, they have become even more obsolete.

Lord Dunlop: The territorial Secretaries of State are a very powerful voice and effective representatives for the home nations of the UK at the heart of the UK Government. They should continue to be so.

Lord McAvoy: My Lords, I welcome the reiteration by the Minister of the administrative organisations and committees that have been set up to monitor how we proceed with the consequences of the Scotland Act. Before the passage of the Scotland Act, a great deal of concern was raised across the House about the implementation of devolution. Quite rightly, the process which dealt with the fiscal framework was confidential. However, would the Minister agree that some more transparency in the future deliberations of how the Scotland Act was processed would be useful?

Lord Dunlop: There are regular reports to Parliament on different aspects of the devolution settlement, and we will always look at how these can be improved. We have undertaken to make annual reports to this House and to Parliament on the general operation of the fiscal framework, and that is very positive.

Lord Sanderson of Bowden: Following on from the last question, when does my noble friend expect to see the first report, post this Act, from the Scottish Fiscal Commission on the projections for Scotland over the next year or two?

Lord Dunlop: I am not sure I can give a specific date for when the first report from that commission will be forthcoming but I am happy to write to my noble friend with further information on that.

Lord Grocott: Has the Minister noticed that the Government in Scotland are not keen on laws being made in Westminster, which the Government in Scotland consider too remote, but are very enthusiastic about laws being made in Brussels? Does he agree that, although very many clever people may be running the SNP, they are not very good at geography?

Lord Dunlop: They are not very good at geography and I do not think that consistency is always a strong point with them either.

Lord Selkirk of Douglas: My Lords, can the Minister confirm that with the increased responsibility will go increased accountability? That must not be forgotten.

Lord Dunlop: At the heart of the Scotland Act 2016 is the transfer of responsibility to the Scottish Parliament, along with greater accountability, so the Scottish Parliament, which has always had great powers to spend money, now has responsibility for determining how that money is raised.

Companies: Overseas Territories Registration
 - Question

Lord Wallace of Saltaire: To ask Her Majesty’s Government what further discussions they have had with Overseas Territories since last year’s Overseas Territories Joint Ministerial  Council about moves towards greater transparency of beneficial ownership for companies registered within their jurisdiction, in the light of the United Kingdom’s chairmanship of the International Anticorruption Summit in May 2016.

Baroness Anelay of St Johns: My Lords, the Government have had extensive technical discussions with overseas territory leaders and officials to help them develop a timely, safe and secure process of exchange of company beneficial ownership information for law enforcement purposes. My right honourable friend the Prime Minister informed the other place on 11 April that we had reached agreement to provide UK law enforcement agencies and tax authorities with full access to company beneficial ownership information held in the territories.

Lord Wallace of Saltaire: No doubt the Minister will recall that in 2013 the Prime Minister called for public registers of beneficial ownership from our overseas territories. Can she explain to us what British sovereignty means in relation to the overseas territories, which benefit from being under British law and protection, when they have refused to accept the Prime Minister’s proposal and we are told that some actually refused to meet Treasury Ministers last December when they were over here for the overseas territories conference? Does the Minister recognise that this is a question not just of tax but of money laundering? Substantial properties in the UK, including in London, are owned through shell companies by dubious men and dubious countries that have earned their money by dubious means.

Baroness Anelay of St Johns: My Lords, this Government are leading the way in ensuring that there is transparency in tax matters internationally. We often find ourselves leading but not necessarily having the support of all those around the world. The overseas territories are indeed separate jurisdictions with their own democratically elected Governments, under which they are responsible for financial matters. We have worked in partnership with them on this matter and have made great progress on having central registers of beneficial ownership. When my right honourable friend the Chancellor of the Exchequer met the G5 in the United States last week, he made it clear that further reforms can be made in the future. So this is a work in progress for everybody, but let us recognise the great strides already made by the overseas territories.

Lord Rooker: My Lords—

Lord Naseby: My Lords—

Baroness Stowell of Beeston: My Lords, I am going to sit down and I suggest that somebody gives way.

Lord Rooker: I am grateful. The Prime Minister deserves substantial credit for the actions taken so far, but why are only UK law enforcement authorities involved in this? What is the problem with our partners? Some weeks ago I went on the first kleptocracy tour in London to view the properties bought with laundered  stolen money through our overseas territories. Our partners in the EU have as much of an interest in finding out who the beneficial owners are as we have, so why is access to this information restricted to UK law enforcement authorities? Gibraltar and Montserrat are opening up their registers to the rest of the EU, so why can we not go a bit further than that? Even if we cannot allow journalists and other interested bodies access to this information, surely the law enforcement authorities of other, friendly partner countries should have access to those registers.

Baroness Anelay of St Johns: My Lords, clearly, there is progress to be made on that very point. My right honourable friend the Chancellor of the Exchequer wrote to the G20 members last week with regard to the G5 initiative on the automatic exchange of beneficial ownership information, exactly in line with what the noble Lord proposes. The initiative is still very new, but we are going to start discussion with the overseas territories and Crown dependencies shortly and I hope that our EU partners will take note.

Lord Naseby: Since it is an international conference and we are in the chair, will the UK Government be pressing the US to explain and to rectify the situation where the states of Delaware, Nevada and Wyoming allow no transparency of information on any subject, to the detriment of our overseas territories? Undoubtedly, if that continues, we will see a loss of business from our overseas territories to those three US states.

Baroness Anelay of St Johns: My Lords, we will be pressing all those who attend the conference to pursue greater transparency. We have made it clear that the global gold standard ought to be public, central registers of beneficial ownership. We will say that to our great friends and to those who are not perhaps such close friends but will be there and will, I hope, be our close friends by the end.

Baroness Lane-Fox of Soho: I declare an interest as a non-exec of the Open Data Institute. Is the Minister aware of the work of the Open Data Institute and many of the interesting not-for-profit start-ups working in the open data space specifically on this issue? I point to one, as an example: OpenCorporates. I urge the Minister to keep using open data as one of the major levers in this transparency piece.

Baroness Anelay of St Johns: I agree entirely with the view that the noble Baroness expressed.

Bishop of Peterborough: My Lords, while I acknowledge the good work done by the Government recently on this, does the Minister agree that public transparency is important not only in the fight against corruption but as a very significant moral issue? Does she agree that it is the duty of all Governments, including those of overseas territories, to work towards public transparency?

Baroness Anelay of St Johns: The right reverend Prelate is right: it is a moral matter. A very wide debate should be held on whether or not there is transparency only in cases where there is a revelation that might  assist with prosecutions, either in the civil courts or criminal courts, on matters such as evasion or aggressive tax avoidance. That is a wider issue, but the right reverend Prelate is right to say that it is one that we ought to be pursuing.

Lord Davies of Oldham: We certainly congratulate the Government on the progress made thus far, but does the Minister accept that unless company ownership is made public and accessible there is no way in which our Government will be able to monitor compliance? It is quite clear that our overseas territories are the primary base for a very great deal of corruption and money laundering, and it is quite clear that we need to act.

Baroness Anelay of St Johns: My Lords, I have to take the noble Lord a little to task here. It is the case that where there is a central register of beneficial ownership, the National Crime Agency and the tax authorities—which are of course operations of this Government—are able to gain access to the very information that the noble Lord specified. I gently remind him that in taking a lead on these matters since 2010, in the coalition Government and now, we have done more than the Labour Government even attempted to do in 13 years.

Lord Howell of Guildford: My Lords—

Baroness Northover: My Lords, as the Minister clearly—

Baroness Stowell of Beeston: My Lords—
Time.

Strathclyde Review
 - Question

Lord Tyler: To ask Her Majesty’s Government whether they will support the establishment of a Joint Committee to consider the recommendations of the Secondary Legislation Scrutiny Committee, the Constitution Committee and the Delegated Powers and Regulatory Reform Committee on the Strathclyde Review (Cm 9177).

Baroness Stowell of Beeston: My Lords, you get me either way.
We are considering the three reports carefully, one of which was published less than a week ago. We are doing so alongside consideration of the recommendations in my noble friend Lord Strathclyde’s review, on which the three reports are based. We will respond to those reports and my noble friend’s review in due course.

Lord Tyler: My Lords, does the Leader of the House now recognise, as do the three reports, that to a considerable extent the Strathclyde review was based on a false premise? We are not in this House challenging,
“the decisive role of the … House of Commons”;
what we are doing is seeking more effective scrutiny of Governments’ secondary legislation by both Houses of Parliament. Surely the right way to examine the range of options for Parliament is for both Houses together, MPs and Peers, to do so in a Joint Select Committee. Is the Leader of the House now listening to these three important committees of your Lordships’ House, or is she simply listening to No. 10?

Baroness Stowell of Beeston: My Lords, one thing that I know that we all agree on, from the many conversations I have had with noble Lords from around this House, is that we must protect this House’s role as an effective revising Chamber that holds the Government to account. I understand some of the points that the noble Lord makes, along with those that have been made by some of the committees of this House, and I will reflect on all the things that have been put forward. I think that it is premature for us to commission another review before the Government have responded to the review that they commissioned from my noble friend Lord Strathclyde. I need to be clear to the House that the Government are seeking something which is in the interest not just of the Government but of Parliament as a whole; that is, that the elected House has the final say on all legislation.

Baroness Smith of Basildon: My Lords, yet again, the noble Baroness seems to misunderstand how statutory instruments operate. They are not a matter between the House of Commons and the House of Lords but a matter between the Executive and Parliament. This issue strikes fundamentally at the very heart of what this House does. We have a responsibility to scrutinise not just primary but secondary legislation. The noble Lord, Lord Tyler, has already pointed out that all three of these Select Committees of your Lordships’ House, all chaired by government party Peers, have totally rejected all the Strathclyde options. The noble Baroness says that she will reflect on the reports and come back to the House “in due course”. Can I ask her to take her time in reflecting on the information in those reports—they bear weight and are very interesting—but then, in the next Session of Parliament, provide time for debate? However, if the speculation about legislation to enforce Strathclyde is true, will she give an undertaking today for an early debate prior to the Queen’s Speech?

Baroness Stowell of Beeston: My Lords, as I have already said, the Government are considering carefully all the options that are in my noble friend Lord Strathclyde’s review. We will take account of what has been included in the reports of the various Select Committees of this House. When we reach a decision, we will publish our response, but we have not yet reached our decision.

Lord Wakeham: My Lords, my noble friend is absolutely right to reflect on these reports, but I hope that she will bear in mind that the proposals of the noble Lord, Lord Strathclyde, were to make sure that secondary legislation was dealt with more democratically in Parliament as a whole. Will she therefore take very good note in her considerations of what the noble Lord said?

Baroness Stowell of Beeston: Yes, I most definitely will. My noble friend put forward three options and recommended one, but what is important for us all to reflect on, as I have said, is that this House has a vital role in scrutinising legislation. That must be maintained in a way that protects our legitimacy and that gives the House of Commons the final say.

Lord Cunningham of Felling: My Lords, as the Leader of the House well knows, the three separate committees of this House comprehensively and unanimously rejected the totality of the proposals made in the Strathclyde report. If the House does not recognise that, the committees have wasted their time. I do not believe that they have. They are very thorough reports. The committees took evidence in public, published that evidence and made sure that the whole House knew who they had spoken to—more than 30 Members of your Lordships’ House were involved in that work. That contrasts with one person, a former Cabinet Minister of the present Administration, meeting people in secret, not publishing any evidence, but publishing his report. There is legitimately in democratic terms no comparison between those exercises. The whole House should recognise that. Will the Leader of the House at least guarantee that the House will have the opportunity to debate these three reports and their recommendations and conclusions before any more hasty, erratic decisions are made by the Government about the powers of your Lordships’ House?

Baroness Stowell of Beeston: My Lords, the Government have not reached a decision yet, so we have not been operating in haste. I say to the noble Lord and to the House as a whole that we currently lack agreement among us about how we can achieve clarity about how we consider secondary legislation in this House. We need to be in a position where we can do our work with clarity, maintain our vital scrutiny role and have the power to reject secondary legislation. My noble friend Lord Strathclyde’s recommended option would retain this House’s power to reject secondary legislation.

Border Force Budget 2016-17
 - Statement

Lord Ahmad of Wimbledon: My Lords, with the leave of the House, I shall repeat as a Statement the response to an Urgent Question given in the other place by my right honourable friend the Home Secretary on the Border Force budget for 2016-17. The Statement is as follows.
“Mr Speaker, the first priority of government is the safety and security of its citizens. The Government have always made the integrity of the UK border a priority and we will never compromise on keeping the people of this country safe from terrorism, criminality and illegal immigration.
My right honourable friend the Chancellor of the Exchequer will publish the Treasury main supply estimates in just over an hour’s time, setting out estimated budget allocations for the whole of government, including  Border Force, for the 2016-17 financial year. In advance of those figures being laid in the House Library, I can inform the House that these estimates will show the indicative budget for Border Force is £558.1 million in 2016-17, a 0.4% reduction in the overall resource spending compared with the 2015-16 supplementary estimate. At the same time, we will increase capital spending at the border by just over 70%, from £40.1 million in 2015-16 to an estimated £68.3 million in 2016-17.
This means that Border Force spending is to all intents and purposes protected compared with 2015-16, with increased capital investment to improve the technology at the border to improve security and intelligence and strengthen control. Over the next four years, we will invest £130 million in state-of-the-art technology at the border.
Since I became Home Secretary six years ago, we have pursued an ambitious programme of reform at the border to keep this country safe. In the last Parliament, we abolished the dysfunctional UK Border Agency, set up under the last Labour Government, and made Border Force directly accountable to Ministers within the Home Office. Since then, Border Force has transformed its working practices, command and control, and leadership. We have invested in new technology like e-gates at airports and heartbeat monitors at freight ports to improve security, prevent illegal entry to the UK, benefit passengers and deliver efficiencies.
At the same time, I have worked closely with my French counterpart, Bernard Cazeneuve, to secure the juxtaposed controls in Calais and Coquelles, reduce the number of migrants attempting to reach the UK, and safeguard UK drivers and hauliers travelling through those ports. We have developed a robust, intelligence-led approach to organised crime at the border, working closely with the National Crime Agency we established in 2012. We have supported greater collaboration between counterterrorism police and Border Force, while increasing counterterrorism budgets to prevent foreign fighters returning and dangerous terrorists travelling to the UK.
These reforms are working. Border security has been enhanced. Border Force continues to perform 100% checks on scheduled passengers arriving in the United Kingdom. Where passengers are deemed a threat to public safety, we can and do exclude them from the UK. In total, 99,020 people have been refused entry to the UK since 2010. We are also disrupting more organised crime at the UK border than ever before. In the past year, Border Force has seized nearly eight tonnes of class A drugs, more than two and a half times as much as in 2009-10. Meanwhile, legitimate passengers and hauliers of goods continue to be provided with excellent levels of service.
The Government remain committed to making further investments where necessary to exploit new technology and strengthen controls. In doing so, Border Force will grow more efficient year on year while improving security for the safety of citizens, businesses and the country as a whole”.

Lord Rosser: I thank the Minister for repeating the Statement made in response to an Urgent Question asked in the House of Commons. The Answer now confirms that the revenue budget for the Border Force for 2016-17 is some 10% less than it was in 2012-13, which no doubt explains in part why the Government are not in control of our borders. If they still maintain that they are in control of our borders, can the noble Lord say whether 100% checks are made on every lorry entering this country? I await to see whether he can give a more direct answer to that question than his right honourable friend the Home Secretary managed in the Commons earlier today.
Finally, in a letter published in the Daily Telegraph today from, to use the words of that newspaper, the country’s most senior security experts—who include two Members of this House—there is a reference to the need better to secure this country’s borders followed by a call for the Government to review security at our borders. Will the Government now agree to undertake the review called for in the letter?

Lord Ahmad of Wimbledon: My Lords, as I have already alluded to, border security has been enhanced and Border Force continues to perform 100% checks on scheduled passengers. As for lorries, we perform rigorous border checks on scheduled arrivals. The noble Lord mentioned specifically a letter that has been written today and the steps that the Government have taken. I am sure that if he reflects on the changes that have been made—apart from the creation of, as I said, a more flexible Border Force, which has allowed us to address the challenges and needs across the country as a whole—we have seen various programmes which have delivered incremental improvements to e-Borders vision, such as the Schengen information system, the warnings index on migration and improved exit checks. We continue to work very closely with our European partners across the board to ensure that we protect not only our borders but borders across the European Union from threats based around security and terrorism.

Lord Paddick: My Lords, while handbags at dawn over the Border Force budget between the chair of the Commons Home Affairs Committee and the Home Secretary might be entertaining, the crucial question must be whether Border Force has and will continue to have the resources it needs to safeguard UK borders from threats of foreign terrorism and illegal immigration, bearing in mind that the Home Secretary has now confirmed that the budget for the Border Force is decreasing while it would appear that the threats are increasing.

Lord Ahmad of Wimbledon: My Lords, I agree with the second part of the noble Lord’s statement: as the challenges and threats are increasing we need to respond accordingly. As I alluded to in the Statement—perhaps it is important to repeat it—one of the steps the Government are taking in the Home Office is investing a further £130 million in the technology around our borders to ensure that we meet the enhanced and ever-evolving threat that faces the United Kingdom.

Lord Jopling: My Lords, will the Minister explain why at some airports passports of people leaving this country are examined and recorded, whereas at others no check whatever is made? Is this because of a shortage of resources?

Lord Ahmad of Wimbledon: As my noble friend will know, it was this Government who reintroduced exit checks last year. He is right to point out that we introduced these checks in particular in larger ports. If there are specific airports he is concerned about I will be happy to discuss them with him afterwards and write to him accordingly.

Lord West of Spithead: My Lords, our coastline outside the major ports is highly vulnerable. Will the Minister confirm that, since we have sent coast guard cutters to the Mediterranean, and because of defects, we have only two coast guard cutters to look after our coastline from the Tyne round to Cornwall and that we have now cancelled the airborne surveillance programme, which indicated targets of interest, such as illegals coming into the country, to those cutters? If that is the case, we are in a very parlous state.

Lord Ahmad of Wimbledon: My Lords, I am sure that the noble Lord will appreciate that I cannot go into the details of the operations of the Border Force and the cutters being deployed, but I assure him that there is sufficient capability and funding in place. Border Force maintains a presence in UK waters. We work in close partnership in ensuring secure borders with the Royal Navy and the National Crime Agency, among others.

Lord Pearson of Rannoch: My Lords, given that the recent pamphlet of government propaganda, which cost £9.2 million and went to every household in the land, claimed that we have kept control of our borders, will the noble Lord tell us whether we can prevent EU nationals entering the United Kingdom? How many have done so in the last five years, and how many do the Government anticipate will do so in the next five years?

Lord Ahmad of Wimbledon: My right honourable friend the Prime Minister made clear when he announced the EU referendum that there would be a clear government position. There is, which is the belief that I know is shared by many across your Lordships’ House that the United Kingdom’s place is within the European Union. On the question of entry by EU nationals, while there are border controls in place in the United Kingdom, part of our agreement with the European Union is to ensure that, while EU nationals visit and work in this country, they, like all citizens, including United Kingdom citizens returning from abroad, go through diligent checks at passport control to ensure that we protect our borders from criminals and terrorists who may seek to permeate those borders.

Lord Swinfen: My Lords—

Lord Harris of Haringey: My Lords, it is this side I think—the noble Lord is not our side. Will the Minister tell us how many officers there are in the   Border Force, how many will it fall to next year, and how that compares with the recommendation by the noble Lord, Lord Stevens of Kirkwhelpington, in the report commissioned by David Cameron a few years ago that there should be 30,000 officers?

Lord Ahmad of Wimbledon: My Lords, I will not go into specific numbers of officers, but as I have already said and say again to the noble Lord, through the creation of the Border Force we have ensured greater flexibility of all Border Force staff to ensure that, wherever the shortages are—as we found last summer when there were challenges from the situation in Calais—the challenges and needs are met by ensuring that there are sufficient staff in whatever port, be it maritime or airports.

Lord Swinfen: My Lords, the noble Lord has told us what is—or, rather, what is not—being done at sea to protect our borders. What is being done on land to intercept illegal entry via our beaches and unmanned airfields in various places in the country?

Lord Ahmad of Wimbledon: I remind my noble friend that, as I have already said, the Border Force works very closely with all agencies, including the police and the National Crime Agency. This ensures that we have a robust approach, with joined-up thinking and sharing of intelligence. Of course, we work with our European partners to ensure that, where there are any concerns on access and illegal entry to the United Kingdom, be it by water or air, we meet that challenge robustly. The message must be clear that our borders are robust: we will prevent those who seek to enter illegally, including those who seek to spread terror in this country or elsewhere in Europe. Together, through sharing of intelligence, we are facing that challenge head-on.

Lord Hughes of Woodside: My Lords, the Minister has twice refused to answer a direct question this afternoon. He said that he cannot comment on matters of how the department works. He also said that he cannot tell us how many people are employed. Neither of those things can be state secrets. How many officers are in fact employed?

Lord Ahmad of Wimbledon: My Lords, the issue that I said I could not reply to specifically was the issue of our coastal waters, their protection and the operational capacity there. I am sure that the noble Lord, when he reflects on that, will see that it is important that we retain the sanctity of ensuring our operational capability. After all, otherwise, we are opening that up to open transparency for anyone who is seeking to influence and get into the UK. We need to ensure that we meet the challenge of illegal immigration. The noble Lord asked for specific numbers. As I have said, the Statement which I have repeated on behalf of the Home Secretary acknowledged that there is a reduction in the resource budget of 0.4%. That will result in our ensuring that wherever shortages are met there is flexibility in the workforce. I do not think that I was avoiding the question; I just said that I am not going to get specifically into the numbers game.

Housing and Planning Bill
 - Report (4th Day)

Relevant documents: 20th, 21st, 26th, 27th and 28th Reports from the Delegated Powers Committee

Baroness Williams of Trafford: My Lords, I beg to move that the Bill now be further considered on Report, and I hope that noble Lords will indulge me in welcoming my noble friend Lady Hanham back to her place.

Amendment 98
Moved by Baroness Gardner of Parkes
98: After Clause 118, insert the following new Clause—“Overcrowding in shared residential buildings(1) Local authorities may set limits for the number of residents that may lawfully reside in each rented property in a shared residential building.(2) Local authorities may set limits under subsection (1) for each relevant rented property whenever the contract for renting the property changes at any point after the day on which this section is brought into effect.(3) If a complaint is made to a local authority about overcrowding in a rented property for which a limit has been set under subsection (1), the local authority may investigate whether the limit is being exceeded and, if so, order the landlord of the property to take action to end the overcrowding.(4) Where the local authority orders a landlord to take action under subsection (3), the local authority may charge the landlord a fee to cover the reasonable costs of the investigation and action undertaken by the local authority.”

Baroness Gardner of Parkes: My Lords, while the House is reorganising itself, I, too, would like to welcome my noble friend Lady Hanham back. She has done much in this field over the years and we have appreciated it. I also remind the House that my interest is declared in the register.
My amendments are fairly straightforward and should not require too much elaboration. They attempt to restore some of the properties, conveniences and protections that were exercised by local authorities before the Deregulation Act. That Act deregulated at a time when New York and Paris were regulating. We lost all control of who was living anywhere, as a council or an authority power. I think that it is very important, particularly at this time, in two respects. The first is where rogue landlords are filling substandard properties, with people crammed in—I am told that three-tier bunks are being used and £70 per night is being charged. I would not swear that it is £70 per night; that is hearsay or press report and I have no idea of what is really being charged. But whatever it is, it is too much for a property where there are no facilities and no possibility of people living a normal life.
That is one group of people. The other group is people concerned with holiday lets. I have explained in the past that I know of these personally, in a block where I have a flat. Ten people are flown in under the Airbnb banner for a one-bedroom flat, and those 10 people take over so many of the facilities, including  hot water and the general convenience of getting in and out. Security doors are left open. Councils and landlords have no control over them whatever, unless they can prove that these people exist. Unless, therefore, the council has some idea of who is in occupation or has the right to investigate if there is a question raised by other people, there really is no way of dealing with it. Amendments 98 and 99 are designed to deal with these problems. I beg to move.

Baroness Grender: My Lords, on behalf of these Benches, I support Amendments 98 and 99 tabled by the noble Baroness, Lady Gardner of Parkes. We are all familiar with some of the hair-raising examples of how many people have been found in some raided properties. Recently, in Newham, seven people were found in a windowless basement. Overall, there were 26 people in that three-bedroom house. In another recent raid, 47 people were found in a property intended for nine. This level of overcrowding goes beyond any notion of civilised accommodation. Issues such as affordability, illegal lettings, economic migrants and particularly the acute property issue in London all impact on these kinds of properties. That is why we on these Benches support the amendments.
When I worked for Shelter in 1985, we campaigned hard for the Housing Act, which covered some of this area. But clearly we now need to update the legislation, in particular because, even if the percentage of overcrowded accommodation has stayed reasonably static, the net amount is increasing because the private rented sector is increasing, and as the private rented sector grows, this becomes more of a problem. For those reasons we support the noble Baroness’s amendments.

Lord Beecham: My Lords, I join others in welcoming the return of the noble Baroness, Lady Hanham, my old sparring partner in local government. Perhaps I should rephrase that and say “my long-standing sparring partner”. It is so good to see her back looking so well. We very much look forward to hearing her contribute, preferably being somewhat more critical of the Government she supports than she was constrained to be in previous years. It is so good to see her back.
In that vein, the Opposition are very sympathetic to the amendments tabled by the noble Baroness, Lady Gardner of Parkes. We hope that the Government will look sympathetically upon them. I cannot see any great difficulty in them so doing. It would be reassuring to hear from the Minister that the Government are as inclined to pursue this issue as they kindly indicated they would do in regard to property guardians—an issue that I raised. The Government have undertaken to look into that problem. I hope that they will go a bit further and either accept the amendment as drafted or come back at Third Reading with different wording that achieves the same objective—because I think that the objective is widely shared across the House.

Earl of Listowel: My Lords, I remind the House that often we are talking about families. Some time ago, I accompanied a health visitor to a property in Waltham Forest. Five families were sharing a kitchen  and bathroom facilities. Perhaps the property was not so overcrowded but it was very insalubrious as they were all sharing those facilities. The front door was wide open when we walked in. We visited a mother whose child was three or four weeks old. The mother was very isolated and desperate. So I remind your Lordships that we are also talking about families when we talk about these people.

Baroness Evans of Bowes Park: I again thank my noble friend Lady Gardner for her amendments, which seek to address overcrowding and unlawful subletting in flats in residential blocks. She set out the case and the problems caused by overcrowding, as, indeed, did other noble Lords who contributed to the debate. Overcrowding is far more than just unpleasant; it is dangerous, and, as we have heard, has impacts on those living in unsatisfactory conditions and the neighbours around them. I hope, therefore, that I can reassure noble Lords that this is a matter we take seriously and that both local authorities and managers of residential blocks already have strong powers to tackle overcrowding and associated problems.
Part X of the Housing Act 1985 deals with statutory overcrowding, which it defines by reference to a room standard and a space standard. If either of these is contravened, an occupier or landlord may be guilty of an offence. The noble Baroness, Lady Grender, mentioned the recent raid in Newham. Last month, a landlord pleaded guilty in Norwich magistrates’ court to four charges relating to overcrowding. The charges, which included failing to license a house in multiple occupation and failing to provide adequate fire precautions to protect the occupiers of the HMO from injury, resulted in fines totalling £5,250, plus costs of £4,951 and a £120 victim surcharge. An investigation by Norwich City Council’s private sector housing team found 12 men crowded into the three-bedroom property, with several people sleeping in a partially adapted loft space with no window. Action is obviously being taken; these examples show that local authorities have powers to act and are using them.
My noble friend and no doubt other noble Lords are aware that Clause 118, dealing with the contravention of an overcrowding notice for an HMO under Section 139 of the Housing Act 2004, would take the level of fine to unlimited, removing the restriction on the fine that may be imposed. This will also bring it into line with the fines for many other Housing Act 2004 offences that are already unlimited.
Local housing authorities can use their existing powers to gain entry to a dwelling to measure rooms to work out the permitted number of people. They also have powers to require information about the number of people sleeping in a dwelling and to inspect, report and prepare proposals on overcrowding generally in all or part of a district. As we have explained previously, where a local authority considers that a property is dangerously overcrowded—a category 1 hazard—it has a duty to act. That might include serving a prohibition order on the dwelling under Part 1 of the Housing Act 2004, thereby limiting the number of persons who can occupy it. It is a criminal  offence to contravene a prohibition order. Earlier this month, a landlord operating an HMO in Waltham Forest was fined £7,000, plus costs of £3,466, for failing to comply with licensing conditions by allowing tenants to live in overcrowded and poor living conditions. The prosecution means that the landlord will now not be able to have direct control over the property.
Under Section 49 of the Housing Act 2004, local authorities can already recover administrative and other expenses incurred by them in making a prohibition order. Noble Lords have argued that local authorities have limited resources to carry out inspections and take forward prosecutions. Through the new civil penalty measures outlined in the Bill, the ability of local authorities to enforce these measures will be strengthened as they will be able to retain penalties of up to £30,000 to use for housing-related activities. I entirely agree that overcrowded flats can cause problems for other residents of the block, but local authorities and managers of the block have the powers to address them. We believe that the measures provided for in the Bill in terms of levying stronger civil penalties will support their ability to take enforcement action. My noble friend’s amendment would enable local authorities to set standards in individual cases in addition to these national standards and systems. While I understand her motivation I fear that, by duplicating existing powers, it would simply cause confusion and uncertainty.
On Amendment 99, I reassure my noble friend that a freeholder and manager of a block of flats already has powers to investigate compliance with the terms of a long lease, such as whether a flat has been sublet in contravention of the terms of the lease. Of course, many—though not all—long leases permit subletting. The lease may specify such matters as the need to seek approval to sublet, a requirement to register the subletting with the landlord, the duration and nature of the subletting and restrictions on the persons to whom the flat can or cannot be sublet. Many leases will require the flat to be occupied only by a family unit in single occupancy. A long leaseholder who sublets in breach of the terms of the lease would risk having the lease forfeited. Where subletting is permitted, the long leaseholder remains responsible for complying with the terms of their own lease and is, therefore, liable if their sub-tenants breach any covenants, such as those that address noise or use of the flat. The long leaseholder would, again, risk forfeiting the lease if the terms were not complied with.
My noble friend also raised concerns about the lack of regulation caused through overcrowding by letting through companies such as Airbnb. Airbnb is not a landlord; it is simply an agent, a matching service that helps those who want to let their homes on a short-term basis to advertise availability to those looking for accommodation. It is one of many companies offering such services and reflects the growing interest in the sharing economy and the demands of today’s digital age. The law is very clear that where a property owner has responsibilities to their landlord or neighbours—for example, under the terms of a long lease—they remain responsible even if the property is sublet. There is no need, therefore, to change the law. In fact, I would again be concerned  that the proposed changes could muddy the water and make it harder for action to be taken against nuisance neighbours.
I hope that my noble friend will be reassured that the Government take her concerns very seriously but that a strong framework is already in place and local authorities are taking action to address some of the issues she has raised. With these reassurances, I ask that she withdraw her amendment.

Baroness Gardner of Parkes: I thank the Minister for that detailed answer. I feel that she has not covered a couple of points. One was that local authorities say that it is impossible for them now to know how long anyone is in the short lettings—the Airbnb-type lettings—which are available for only so many days in a year. As local authorities have pointed out, how can you possibly know how many days in the year they are being occupied in that way if you have no idea who is in them? In the past, they had the right to go and check that.
There is another point that the Minister has not really covered regarding some local authorities. I would point out the difference between Westminster and, for example, Kensington and Chelsea. Westminster used to use six full-time agents to go and check which people were in a place and for how long—it cannot do that any longer. Kensington and Chelsea says that it cannot afford to do that. The point covered in my amendment was that the local authority would be able to charge a fee to the landlord for the purpose of going. I would like to be reassured by the Minister that the Government will look at the regulations as to how that cost can be covered in such a way that local authorities will not be heavily out of pocket if they attempt to do many of the things which, as she acknowledged, are desirable. If I could have an answer on those points, I would be grateful.

Baroness Evans of Bowes Park: If the landlord is a rogue landlord and the local authority is investigating, it can recover the costs.

Baroness Gardner of Parkes: That does not really answer the point because I was not talking about a rogue landlord; I was talking about people doing holiday lets and who were therefore time limited on how long those could be. There is no way at present of checking how that time applies. I am sorry to be complicating life for the Front Bench.

Baroness Evans of Bowes Park: As I said, the key issue is that where there is overcrowding, particularly within a flat, it could be considered within that case that there was a rogue landlord and, in those cases, local authorities can recover the costs.

Baroness Gardner of Parkes: We are going nowhere on this because I am getting answers to the other half of the question and not the half I am asking about. But there is probably genuine good will on the part of the Government and I therefore ask the Minister to say that they will look at the regulations on this and see what can or should be done in the future.

Baroness Evans of Bowes Park: Yes, I am happy to take that away.

Baroness Gardner of Parkes: On that basis, I will not press my amendments.
Amendment 98 withdrawn.
Amendment 99 not moved.

Amendment 99ZA
Moved by Lord Young of Cookham
99ZA: After Clause 120, insert the following new Clause—“Tenants’ associations: power to request information about tenantsAfter section 29 of the Landlord and Tenant Act 1985 insert—“29A Tenants’ associations: power to request information about tenants(1) The Secretary of State may by regulations impose duties on a landlord to provide the secretary of a relevant tenants’ association with information about relevant qualifying tenants.(2) The regulations may—(a) make provision about the tenants about whom information must be provided and what information must be provided;(b) require a landlord to seek the consent of a tenant to the provision of information about that tenant;(c) require a landlord to identify how many tenants have not consented.(3) The regulations may—(a) authorise a landlord to charge costs specified in or determined in accordance with the regulations;(b) impose time limits on a landlord for the taking of any steps under the regulations;(c) make provision about the form or content of any notices under the regulations (including provision permitting or requiring a person to design the form of a notice);(d) make other provision as to the procedure in connection with anything authorised or required by the regulations.(4) The regulations may confer power on a court or tribunal to make an order remedying a failure by a landlord to comply with the regulations.(5) The regulations may include supplementary, incidental, transitional or saving provision.(6) Regulations under this section are to be made by statutory instrument.(7) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.(8) In this section—“relevant tenants’ association”, in relation to a landlord, means an association of tenants of the landlord at least one of whom is a qualifying tenant of a dwelling in England;“relevant qualifying tenant” means—a person who is a qualifying tenant of a dwelling in England and a member of the relevant tenants’ association, ora person who is a qualifying tenant of a dwelling in England by virtue of being required to contribute to the same costs as a qualifying tenant who is a member of the relevant tenants’ association;  “qualifying tenant” means a tenant who, under the terms of the lease, is required to contribute to the same costs as another tenant by the payment of a service charge.””

Lord Young of Cookham: My Lords, Amendment 99ZA reflects an amendment that I moved in Committee. It received general approbation but I was advised by my noble friend the Minister to withdraw it so that it might have cosmetic surgery to make it slightly more attractive. I have now retabled it. In a nutshell, the Landlord and Tenant Act 1985, which I think I put on the statute book, allows a tenants’ association made up of “qualifying tenants” to seek statutory recognition. Such recognition provides the tenants’ association with additional rights over and above those enjoyed by individual leaseholders, including the right to be consulted about the appointment of managing agents and to be notified of works proposed by the landlord and to receive copies of estimates.
It has become apparent that tenants’ associations are finding it increasingly difficult to attain the number of members they need before they can apply for statutory recognition. This is because of difficulties in contacting absent leaseholders: that is, leaseholders who are not resident in a block—for example, buy-to-let investors. The amendment addresses that problem by requiring a landlord to supply to the secretary of a tenants’ association information which would allow contact to be made with absent leaseholders for the purpose of increasing the association’s membership and thereby its chances of obtaining recognition. That needs to be subject to the leaseholders’ consent to comply with data protection.
Amendment 99A seeks to address an irregularity concerning consideration of the recovery of a landlord’s costs from leaseholders as administrative charges. As noble Lords heard in Committee, at present, where a lease allows a landlord to recover the costs of legal proceedings through the service charge, a court or tribunal can decide to restrict the amount that can be recovered in that way. Courts or tribunals do not have similar powers where recovery of the costs of proceedings as an administrative charge is permitted by the lease. This can lead to unfairness, as the leaseholder will have no choice but to pay the cost of proceedings as an administration charge, regardless of the proceedings. Arguably, this discourages leaseholders from exercising their right to challenge the amount of a service charge, particularly as landlords’ costs in those proceedings could well exceed the amount in dispute.
The amendment would enable the tribunal or court to consider, on application, whether it is reasonable for a landlord to recover all or part of the costs. That is not to say that a landlord should not be able to recover the costs, but, rather, that the tribunal or court should be able to consider whether it is reasonable for them to do so. I am sure that noble Lords will agree that such an irregularity should be corrected. Amendment 138B simply brings these two amendments into force. I beg to move.

Lord Beecham: My Lords, we on the Opposition Benches entirely endorse the proposals made by the noble Lord, congratulate him on securing agreement from the Government and look forward to this debate ending very quickly.

Viscount Younger of Leckie: My Lords, I hope that I can honour that approach. However, before I begin, I will take this opportunity personally to welcome back to her place my noble friend Lady Hanham. She is a much-valued colleague and has been much missed.
I thank my noble friend Lord Young for tabling these amendments, which have clearly generated support across the House in this very short debate. I appreciate that we discussed them in Committee, but it is helpful to be able to consider them once again today. They follow helpful interventions in both Houses, and I take this opportunity to thank both my noble friend and Sir Peter Bottomley in the other place for raising awareness of such issues.
As my noble friend eloquently set out, giving leaseholders the right to obtain contact information for other leaseholders in a shared block from their landlord, subject to their consent, will help those leaseholders fulfil their statutory right to have their tenants’ association recognised. Addressing the irregularity concerning the inability of courts and tribunals to restrict recovery of a landlord’s legal costs from leaseholders as administrative charges where they consider it appropriate will help to address a perceived unfairness in the current system, which I think we can all agree is the right thing to do. In conclusion, I am very happy to accept my noble friend’s amendments and I hope that they will be accepted by the House.

Lord Young of Cookham: I am very grateful to my noble friend.
Amendment 99ZA agreed.

Amendment 99A
Moved by Lord Young of Cookham
99A: After Clause 120, insert the following new Clause—“Limitation of administration charges: costs of proceedingsIn Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (administration charges), after paragraph 5 insert—“Limitation of administration charges: costs of proceedings5A_(1) A tenant of a dwelling in England may apply to the relevant court or tribunal for an order reducing or extinguishing the tenant’s liability to pay a particular administration charge in respect of litigation costs._(2) The relevant court or tribunal may make whatever order on the application it considers to be just and equitable._(3) In this paragraph—(a) “litigation costs” means costs incurred, or to be incurred, by the landlord in connection with proceedings of a kind mentioned in the table, and(b) “the relevant court or tribunal” means the court or tribunal mentioned in the table in relation to those proceedings.Proceedings to which costs relate“The relevant court or tribunal”Court proceedingsThe court before which the proceedings are taking place or, if the application is made after the proceedings are concluded, the county court First-tier Tribunal proceedingsThe First-tier Tribunal  Upper Tribunal proceedingsThe Upper TribunalArbitration proceedingsThe arbitral tribunal or, if the application is made after the proceedings are concluded, the county court.”
Amendment 99A agreed.

Amendment 99B
Moved by Baroness Hayter of Kentish Town
99B: After Clause 121, insert the following new Clause—“Power to require property agents to join client money protection schemes(1) The Secretary of State may by regulations require a property agent to be a member of—(a) a client money protection scheme approved by the Secretary of State for the purpose of the regulations, or(b) a government administered client money protection scheme that is designated by the Secretary of State for the purpose of the regulations.(2) The regulations may impose requirements about the nature of the membership that a property agent must obtain (for example, by requiring a property agent to obtain membership that results in a particular level of compensation being available).(3) The regulations shall—(a) require a property agent to obtain a certificate confirming the property agent’s membership of the scheme;(b) require the property agent to display or publish the certificate in accordance with the regulations;(c) require the property agent to produce a copy of the certificate, on request, in accordance with the regulations.(4) In this section—“client money protection scheme” means a scheme which enables a person on whose behalf a property agent holds money to be compensated if all or part of that money is not repaid in circumstances in which the scheme applies;“government administered client money protection scheme” means a client money protection scheme thatis administered by or on behalf of the Secretary of State;“property agent” means—a person who engages in English letting agency work within the meaning of section 52, ora person who engages in English property management work within the meaning of section 53,other than a person who engages in that work in the course of the person’s employment under a contract of employment.”

Baroness Hayter of Kentish Town: My Lords, this manuscript amendment is in my name and that of the noble Lord, Lord Palmer of Childs Hill. The noble Lords, Lord Palmer of Childs Hill and Lord Foster, and my noble friend Lord Kennedy had, together with me, tabled Amendment 100 about client money protection to require every letting agent to have money they hold belonging either to the tenant by way of advance rent or to a landlord as rent received to be protected, so  that even if the letting agent disappeared or went bankrupt, such money would be safe and available to the landlord.
Such money is not the agent’s money and, as with clients’ money handled by solicitors and others, should be held separately in a protected client account. We sought to introduce this requirement into the Consumer Rights Bill, at which point the Government heard—and, I think, had some sympathy with—the case, but the requirement was only for every letting agent to display whether or not they had such client money protection. Our view is that this hardly works for landlords, who usually take the biggest hit when such money disappears. As my sister, herself a typical landlord with three units, said, it never occurred to her to ask her agent whether he had client money protection. It cannot help tenants who have to pay their rent to whichever agent the landlord nominates, even if it is clear that their money is not protected.
Since tabling Amendment 100, requiring such funds to be in a segregated, ring-fenced client account, we have had constructive discussions with the Minister and her colleague in the Commons, Brandon Lewis, whose willingness to hear our arguments, and those of tenants, good letting agents, and landlords, has led to our new, manuscript amendments, tabled today in the names of myself and the noble Lord, Lord Palmer of Childs Hill. These amendments allow for regulations which would provide exactly what we have been recommending, and we understand that the Government are willing to accept the amendments—for which we owe thanks also to the Bill team and their colleagues for such brilliant and very speedy drafting. Our civil servants have again demonstrated their amazing flexibility and expertise.
We also understand that the Government are to review the current transparency rules and, if the evidence indicates that they have failed in the Government’s intent, will bring forward the regulations allowed for in these new amendments. The amendments will be welcomed by tenants, landlords, reliable agents and, I believe, by the House. I beg to move.

Lord Bichard: My Lords, given the length of today’s manuscript amendments, I propose that the House dispense with the usual requirement to read it out in its entirety, unless any noble Lord objects.

Lord Palmer of Childs Hill: My Lords, I thank the Deputy Speaker for not reading out the amendment; I have read it so many times that I really feel that I know it by heart. I thank the noble Baroness, Lady Hayter, for working with me on this, as it has been very helpful. I particularly thank the Ministers here and in the Commons for constructive dialogue, and accepting the problems that we were trying to highlight, which have been brought to our attention by the lettings industry—tenants, landlords and, indeed, letting agents. The noble Baroness thanked a lot of people. I add just one other person to that: the parliamentary draftsman who ended up with the amendments in  front of us. When I saw the amendment, I thought that it was what it should have said when we did it in the beginning. It says it very well. I think that the noble Baroness and I would have liked it to be slightly firmer in saying that it will happen, but we took the Ministers’ intention—which I hope this Minister will repeat in the debate—that this is something that they want to do and intend to happen.
I shall not make a long speech about this, because we have had much debate in earlier sittings, but I shall raise one or two points again. Some 80% of the lettings agency sector—these are the figures used by the Minister—have client money protection. The new amendment and the original amendment are for the 20% who put tenants and landlords at risk. If a letting agent goes bust or goes walkabout in a liquidation, tenants’ money held and the rights of landlords and tenants are at the bottom of the creditors’ queue in a liquidation or bankruptcy. Client money protection will be mandatory in Wales from November. I am sure many noble Lords will say that Wales leads, and under its new Rent Smart initiative, it certainly does. All letting agents will be required to apply for a licence and part of the application process is showing that they have professional indemnity insurance and client money protection insurance and are a member of a redress scheme. If the Welsh can do it, I am glad to see that the English are following.
Perhaps the best way of illustrating the need for this amendment is by telling horror stories, of which there are many. This month, it was reported that a company called Whitefield Properties took rental money due to landlords and tenants’ deposits over a four-year period. The money was paid into the firm’s bank account and was, perhaps carelessly, not protected. It was reported that £123,000 of customers’ money went missing. The Staffordshire firm, with branches in Milton, Leek and Crewe, went into administration in 2014. If we were still arguing for this amendment, I would give many more examples to try to make my case.
A lot of the 20% not-covered agents target vulnerable groups. As they are vulnerable, they do not satisfy credit checks, so they cannot give the guarantees that banks would often offer. Agents, generally in the 20% section, often ask for something like a full year’s rent in advance because the person is not trusted. The person probably borrows the money to get that year’s rent in advance. History shows that a lot of these large sums of rent in advance go into the agent’s bank account, and even if it is in an account that may internally be called a client account, if it is not recognised as such by the bank, those moneys can, and often are, used by the agent for one or purpose or another, very often because the agent is overtrading, spending more money than it should and using that money.
A law making client money protection insurance mandatory for all letting agents is long overdue. I thank the Minister and her colleague in the Commons, and I hope that when she replies she will promise that “may” will be made firmer so that it will be “shall”, as I want. Like the noble Baroness, Lady Hayter, I conceded that the intent was there, but I hope the intent is reported when the Minister stands.

Lord Foster of Bath: My Lords, I, too, am pleased to see the noble Baroness, Lady Hanham, in her place. I have fond memories of working with her in DCLG. Although my name is on Amendment 100, in the light of recent developments I rise to support the amendment in the name of the noble Baroness, Lady Hayter, and my noble friend Lord Palmer. I particularly wanted to speak to congratulate both of them on the sterling work they have done in this area and to thank the members of the ministerial team for being willing to listen to the arguments that have been put.
I previously made the case for why mandatory client money protection is needed, and all those who have spoken have done that very eloquently. We are now aware that the Minister has received letters from a large number of industry bodies and letting agencies asking for mandatory CMP. It is worth reflecting that some of those supporting documents make the case even more powerfully, with one letting agency saying that all it is asking for is provisions similar to those that already apply to estate agents, another pointing out that tenants and landlords can get a false sense of security because it is widely assumed that such protection already exists across the industry by default and yet another using the phrase:
“The sector is crying out for proper regulation”.
It is worth reflecting that in another place the Minister, Brandon Lewis, rejected calls for mandatory CMP, saying that it,
“would be a step too far and would overburden a market that is perfectly capable of self-regulation”.—[Official Report, Commons, Housing and Planning Bill Committee, 10/12/2015; col. 719.]
In Committee in your Lordships’ House, the Minister, the noble Viscount, Lord Younger, clearly had not been given a new script because he said exactly the same words. However, now that the industry has said with one voice that it wants mandatory CMP and does not think the costs would be too high, I hope that when she responds the Minister will have been given a new script.

Lord Beecham: I join this parliamentary lovefest briefly to join others in congratulating the Minister on accepting the amendments and to pay tribute to my noble friend Lady Hayter; I do not think a doughtier champion of consumer rights could be found anywhere. This is a very satisfactory conclusion and it enables us to get on to slightly more contentious matters a little further down the Marshalled List.

Baroness Williams of Trafford: My Lords, I am not entirely sticking to a script. In saying that, though, I hope I can reflect the views of the Government accurately. I add my tribute to the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer, and of course to the parliamentary draftsmen, who have turned this around so quickly. The noble Baroness and the noble Lord are experts in this area and have taught me much about it over the past few weeks. We have met them both in recent days and I have listened carefully to the points they have made.
I thank the noble Baroness for tabling this amendment following our discussion. If approved by this House, it will provide an enabling power for the Secretary of State to make regulations by affirmative procedure to  require letting agents and property management agents to belong to a client money protection scheme. It will also provide a clear enforcement mechanism, which is important for ensuring that this regulation has teeth.
The Government have already shown our commitment to taking steps on this issue, committing to a review of the transparency legislation, which includes a requirement for letting agents to be transparent about whether they offer client money protection, and to work with the sector to explore the detailed options for regulation. However, it is important that we ensure that the regulation is balanced and does not overburden the sector, and that we get the detail of the legislation right and do not rush into it. So the review will be important in informing the details of the regulation, and I am very happy to give my assurance that the Government will act on its findings at the earliest opportunity.
There has been some discussion about “must”, “shall” and “may”. I have almost lost track of where we got to on the amendment, but I think we were satisfied on the balance of “must”, “may” and “shall”. Still, in no way does that lessen our commitment to the issue at hand.
I inform the House that the Housing Minister and I have asked the noble Baroness, Lady Hayter, and the noble Lord, Lord Palmer, to play a key role in the review of client money protection and transparency, reflecting their knowledge of and commitment to these issues, and I am very grateful that they have agreed. I hope that, with those points in mind, noble Lords will agree to support the amendment. I think that is the first time I have said that in this housing Bill.

Baroness Hayter of Kentish Town: All I can say is thank you.
Amendment 99B agreed.

Amendments 99C and 99D
Moved by Baroness Hayter of Kentish Town
99C: After Clause 121, insert the following new Clause—“Client money protection schemes: approval or designation(1) The Secretary of State may by regulations make provision about the approval or designation of client money protection schemes for the purposes of regulations under section (Power to require property agents to join client money protection schemes).(2) The regulations may, in particular, make provision about—(a) the making of applications for approval;(b) conditions which must be satisfied before approval may be given or a scheme may be designated;(c) conditions which must be complied with by administrators of approved or designated client money protection schemes (including conditions requiring the issue of certificates for the purposes of regulations under section (Power to require property agents to join client money protection schemes)(3) and about the form of those certificates);(d) the withdrawal of approval or revocation of a designation.”
99D: After Clause 121, insert the following new Clause—“Enforcement of client money protection scheme regulations  (1) The Secretary of State may by regulations make provision about the enforcement of a duty imposed by regulations under section (Power to require property agents to join client money protection schemes).(2) The regulations may—(a) confer functions on a local authority in England;(b) require a property agent who fails to comply with a duty imposed by regulations under (Power to require property agents to join client money protection schemes) to pay a financial penalty (or more than one penalty in the event of a continuing failure).(3) The provision that may be made under subsection (2)(a) includes provision requiring a local authority in England, when carrying out functions under the regulations, to have regard to guidance given by the Secretary of State.(4) The provision that may be made under subsection (2)(b) includes provision—(a) about the procedure to be followed in imposing penalties;(b) about the amount of penalties;(c) conferring rights of appeal against penalties;(d) for the enforcement of penalties;(e) authorising a local authority in England to use sums paid by way of penalties for the purposes of any of its functions.(5) In this section “local authority in England” means—(a) a district council,(b) a county council for an area for which there is no district council,(c) a London borough council,(d) the Common Council of the City of London, or(e) the Council of the Isles of Scilly.”
Amendments 99C and 99D agreed.
Amendment 100 not moved.

Amendment 101
Moved by Baroness Gardner of Parkes
101: After Clause 124, insert the following new Clause—“Changes to leases: qualifying threshold for right to manage(1) Where leaseholders in a shared building have the right to manage and a beneficial change or modification is proposed to the terms of the leases in relation to communal services or general safeguards held in that shared building, the change shall be agreed and made if a simple majority of the eligible leaseholders vote in favour of the proposal.(2) In respect of a vote under subsection (1), a leaseholder shall —(a) have the right to appoint a proxy to vote on his or her behalf; and(b) be given adequate notice of when the vote will take place.(3) A change to the terms of the leases under subsection (1) may include leasehold enfranchisement.(4) If a leaseholder or his or her proxy fails to participate in the vote held under subsection (1) and reasonable arrangements have been made to enable him or her to do so, he or she shall be deemed to have voted in favour of the proposal.”

Baroness Gardner of Parkes: My Lords, this is an issue about which I feel quite strongly. I cannot understand why in order to get the right to manage, which is set out in statute, you require 50% of the leaseholders to  agree, but having got the right to manage, you cannot do anything very significant to deal with any problems in a building unless you have 100%. I have tabled Questions about this and at least four different Ministers have conceded that 100% is totally impossible to obtain. I welcomed my noble friend Lady Hanham earlier; she was one of the Ministers who said that to me. It is good to see her here and means that I do not have to prove my point about the statements, although the Library came up with these quotes for me, and I can certainly prove the point.
I am pleased to see the noble Lord, Lord Kennedy. When I raised the issue about people who fail to respond in any way and said that they should be deemed to have supported a proposal, he said—I am not using his words; I cannot quote Hansard exactly—that that might not be a bad way of dealing with what is certainly a growing problem, particularly in central London. In a number of blocks, perhaps not a majority but certainly a significant minority of the flats are in foreign ownership or owned by people who simply do not want to know whether the building is falling down around them. In rare cases, a rather ill-intentioned landlord may be hoping to make the place unliveable so that he can get all the tenants out and sell the skeleton building on for a lot of money. I have encountered that.
It is therefore very important that we find a way of dealing with this, and one way would be to reduce the percentage required for it. I suggested a simple majority; I appreciate that that may be too simple but there must be somewhere between the simple majority and the impossible total. The Government must agree to look at that. I will not be satisfied unless they agree to look at it, because this issue is getting worse.
Amendment 102 is grouped with this, but it is on quite a different subject. Would the Front Bench like me to speak to both now? The Whip nods his head. Amendment 102 is on the totally different issue about sinking funds for repairs, and it probably also applies to the type of block I was speaking about before. It has come to my attention through people who bought their council flats in the days of Margaret Thatcher; they have therefore owned them for a long time, and they find that their income has got less as they have got older. I can quote the case of a woman who wrote to me, whose total income is £10,000 a year. She has just had a bill for the roof repair, and her contribution as a leaseholder is £12,500. I followed this case up with the Hastoe Housing Association, which now has the property—it was originally local authority-controlled—and it said, “We’d like to be able to help, but this case is one of 26 cases where people are in exactly the same position”.
Where people buy their leasehold in a block where most people are tenants, whatever the tenants have to pay should be built into their rent and therefore at a level which is possible for them to manage. Instead, people can suddenly find themselves with only the old age pension and they get a whacking great bill for something to be done to the property. I have known other cases where the payment required was much higher than £12,000; sometimes the contribution to the roof or to replacing all the windows is £30,000.
People need to have a sinking fund from the time they buy the leasehold or, if not from that time, at least from the present time so that they will be gradually building up at least a little something towards the costs. I hope that the housing association or the local authority would then be able to exercise a degree of judgment and try to retain those people who have already lived in those flats for so many years. It is therefore very important that the Government are willing to look at these two quite different issues in Amendments 101 and 102. I beg to move.

Baroness Maddock: My Lords, I have spoken only about twice on this Bill but I must declare an interest as a vice-president of the Local Government Association.
I support the noble Baroness, Lady Gardner of Parkes. She has been a doughty campaigner on leasehold. Over the years several of us in the Chamber, including the noble Baroness who has returned to us today and, I think, the noble Baroness, Lady Andrews, have tried to grapple with the issue of leasehold. The legality of it is incredibly complex and the Labour Government tried to do something about it. I remember spending hours on the last leasehold reform Bill, and some of the things that the noble Baroness, Lady Gardner, has talked about today came forward in that Bill. At the time, we said that we were not happy about some aspects of it but we really needed to look at what was happening and review it over time.
I appreciate that a review of leasehold legislation is probably something that the Government do not want to go near. It is incredibly complex but, given that a lot of building has gone on in London and a lot of the new flats are leasehold, this is an area that we need to look at. Because it is so complex, some leasehold landlords can use the legislation to disadvantage leaseholders—sometimes financially and sometimes making them powerless to do anything about what goes on in their building. This is an important area and, as I said, I support the noble Baroness, Lady Gardner, because she has been a doughty campaigner on it over the years. I recognise that these amendments relate to matters that the Government probably do not want to look at, but I share her view that they really need to look at least at the issues that she has raised today. They need to be reviewed and revisited.

Baroness Andrews: My Lords, how lovely it is to see the noble Baroness, Lady Hanham, back in her place. It is really great to see her.
I was indeed one of the Ministers who, on a previous occasion, had to deal with the subject matter of Amendment 102. It is a difficult issue and I congratulate the noble Baroness, Lady Gardner, on her resilience in raising it. It is extremely important, not least as regards those blocks of flats where the owners have either bought their flats outright or have bought them under the right-to-buy scheme and then suddenly, to their total surprise, find themselves landed with enormous bills. It was not unusual for there to be a charge of £30,000—for example, for putting in a lift. It was an extremely difficult issue and the noble Baroness is absolutely right that we wrestled with it and discussed it with all manner of agencies, leasehold organisations  and so on. It was very difficult to find an equitable and affordable solution. The fact that it is still hanging around is a tragedy and I hope that the Minister and her team can show us some ingenuity. The proposition in Amendment 102 is very sensible. If people anticipated these sorts of bills, they might well be able to afford them.
With Amendment 101, again, the noble Baroness is absolutely right. This is an absurd situation and the problem is growing. Most people living in leasehold blocks do not know that this is the situation and are therefore completely baffled as to why it is impossible to get anything done. So, if we are to have regard to the reality of the housing situation in London, this is something that has to be addressed. It may not be possible to do so in this Bill but maybe there are other Bills in the pipeline, and maybe it will be possible for the department to come back with something creative on both these issues. I hope so.

Earl of Lytton: My Lords, I support this group of amendments and, in so doing, I declare my interests as a vice-president of the Local Government Association and, more particularly, as a landlord from time to time, with members of my family, of both shorthold and long leasehold tenants.
Dealing with the first point in Amendment 101, I say from my experience as a practising chartered surveyor that this is a potent area for problems, and I will give perhaps a couple of examples. The first is that for many of these blocks of flats, both large and small, there are a significant number of absentee long leaseholders, so that the occupants of the building are under assured shorthold tenancies or similar short-term occupations. The occupants, because of the nature of their short-term interest, do not really care too much about what happens to the fabric of the building—that is outside the scope of what is of interest to them. The superior landlord, the long leaseholder, is very often absent and equally disengaged from the process. Therefore, there tends to be, as I have come across before, a small proportion of those who are long leaseholders and residents who find themselves unable to do the things that the noble Baroness, Lady Gardner, has alluded to.
It gets worse, because of course the right to manage is just that, and it is circumscribed in that way. But what if the process of management means making alterations to a heating system that require you to knock a hole through the outside wall, which is part of the freehold, and which therefore go beyond the strict terms of “management”? As the noble Baroness said, if you have a truculent freeholder, that is a potent source of problems in terms of getting essential works done and making sure that the premises as a whole remain fit for purpose.
I have witnessed over many years the number of measures to try to strengthen the position of long leaseholders in terms of their collective rights of enfranchisement, their individual rights to extend a lease and their right to the collective management of their block. That is all mired in this split between the ownership—ownership of the fabric of the building—and the rights of the leaseholder, meaning the rights of use  and perhaps extending to internal, non-structural partitions such as the floorboards, the ceiling boards, the internal plaster finishes of the walls and perhaps the odd window and door. When you are dealing with the management of a property, you have to take a holistic view if you are going to get it right, because all these things are part and parcel of that. As we have tried to dissect “leasehold” from “freehold”, we have run into a whole series of problems of our own making. It would be nice to say that we would come up with a different type of tenure altogether but I know that that has been tried and it seems to have run on to the rocks. At any rate, I encourage the Government to take a close look at Amendment 101 because this issue is causing grinding irritation to the reasonable aspirations to manage a building.
On Amendment 102—the sinking fund for repairs—I fully understand what the noble Baronesses, Lady Gardner and Lady Maddock, said. A roof may need to be renewed every 50 or 60 years, or, if it is a flat roof, every 25 years; a heating system may need to be renewed every 25 years; and there are other things that may have longer discounted life expectancies of one sort or another. If you have buildings with differential tenure, it is axiomatic that the freeholder, or the person responsible for the management and collecting of money to carry out certain work, may have a series of different objectives. If they are assured shorthold tenancies where the tenants are not responsible for contributing to a sinking fund of some sort, that is one thing, but there may be other types of occupier on less than long leasehold who would be so responsible. As the noble Baroness pointed out, when the buyer of a long leasehold is in this situation, it is essential to know that robust processes are in place for procuring that management and that it does not turn up, as I have seen so many times, all in one go. This could be toxic in terms of the transaction of properties because, if there is a rolled-up liability for large capital sums on repairs, a savvy purchaser of a long leasehold interest will certainly be well advised, as I have often been asked, to look into what lurks in the future expenditure, if that information can be found. Very often, one cannot easily find that information because it is with some other body such as the freeholder’s managing agent.
Making such processes properly planned and properly predictable is a valuable aid to making sure that these sorts of things, which would stand in the way of somebody buying a freehold because they were fearful of the costs which had been rolled up and might not be fully known, were brought out into the open and that a sinking fund was available as a credit against those costs. That seems to be invaluable and, to that extent, I support both amendments.

Lord Kennedy of Southwark: My Lords, as this is my first contribution to Report today, I refer noble Lords to my declaration of interests and confirm that I am an elected councillor in the London Borough of Lewisham. I join other noble Lords in welcoming the noble Baroness, Lady Hanham, back to your Lordships’ House. She has been much missed and is very welcome here today.
The issues raised in these two amendments were discussed in Committee. The noble Baroness, Lady Gardner of Parkes, is knowledgeable on these matters and it is always worth listening to and taking note of what she says on a variety of matters, particularly concerning leaseholders.
We on these Benches largely welcome the spirit of what is proposed here, but I am not convinced that it strikes the right balance. In Committee, my noble friend Lord Beecham raised issues in respect of the wording, specifically use of the term “buyer” in proposed new subsection (1) in Amendment 102, and asked what majority would be required. Equally, on Amendment 101, concerns were raised about the practicalities by my noble friend Lord Campbell-Savours. How do you deal with a situation where 51%, a simple majority, want to make a change, but 49% strongly oppose it? I understand fully the noble Baroness’s point about 100%, because of course that would be impossible to achieve. However, at this stage, I think that we need to come up with another mechanism or formula to address the concerns raised in the amendment. I hope that the Government will be much more amenable to finding a way forward and not give the response that the noble Baroness had from the previous four Ministers.

Viscount Younger of Leckie: My Lords, I thank my noble friend Lady Gardner for her amendments on leasehold, which have led to a short and informative debate. I want to take this opportunity to thank my noble friend for her tireless efforts and dedicated service in raising issues on behalf of those in the leasehold sector.
As we have heard, Amendment 101 would modify a lease where leaseholders have exercised the right to manage. As a leaseholder herself, my noble friend will appreciate the benefits and the associated responsibilities of acquiring and exercising the right to manage. However, this amendment, although introduced with the best intentions, would not achieve what its intended purpose appears to be.
As noble Lords will know, the right to manage allows leaseholders of flats to take over, by means of a right-to-manage company, the freeholder’s or landlord’s management responsibilities. Where the right to manage has been exercised, the amendment would allow leases to be modified in relation to communal services or general safeguards if a majority of eligible leaseholders voted in favour of the modifications. A lease can be varied only by mutual agreement of all the parties to the lease, or by reference to a tribunal or court. If one or more leaseholders believe that their lease in a block needs to be varied, the Landlord and Tenant Act 1987 already allows them to seek a variation from a tribunal, in particular circumstances, or a court.
The amendment tabled states that if a leaseholder or their proxy fails to vote, they will be deemed to have voted in favour of a proposal to vary a lease. I hope my noble friend agrees there may be many reasons why a leaseholder or their proxy could not partake in a vote. The amendment appears to be somewhat undemocratic in extrapolating a leaseholder’s non-vote to be a vote in favour for a proposal that would affect an individual’s property rights. As mentioned by the noble Lord, Lord Kennedy, I believe the noble Lord,  Lord Campbell-Savours, raised this concern when the matter was discussed in Committee. However, I appreciate that my noble friend Lady Gardner has strong views and genuine frustrations on this. I would welcome the opportunity to meet her outside this Chamber to look at the voting procedure in right to manage and to consider, if necessary with the wider leasehold sector, whether any legislative or other changes are needed to address her concerns.
My noble friend mentioned that she did not really know whether majority should be defined as just over 50% or upwards. That leads me to believe that further discussion is needed. She also mentioned the question of 100% agreement. Again, I believe it was mentioned in Committee that the question of not being able to do anything without 100% agreement is not the case, because the right to manage companies need a majority of directors at a meeting of directors and 100% is needed only for the variation to the lease.
I am sure my noble friend will agree that it is important that we seek a greater understanding of the issue raised. I hope she will join us in looking at this in the wider context of the legislative framework on leasehold and the right to manage, and that we do not rush to make a change to the Bill. The noble Baroness, Lady Maddock, hit the nail on the head when she said that this was a challenging and complex issue. Although she did not say this, I believe this is something that should not be rushed and we should look into it in a lot more detail.
Amendment 102 was also debated in Committee and raised by my noble friend Lady Gardner. As I said, I agree with my noble friend on the importance of there being sufficient funds available for the repair and maintenance of leasehold blocks. Sinking funds can indeed play an important role in mitigating large, one-off service charge demands. However, as I set out in Committee, I believe that these concerns are unfounded. This amendment, while well intentioned, would conflict with existing requirements and responsibilities under the terms of the lease and the existing legal contract between the freeholder and leaseholder.
A lease provides for the collection of service charges for the maintenance of the block. In many cases, provision is also made for money to be collected to support a sinking fund. Where it does not—this is important—legislation makes it possible to seek a variation of the lease to provide for a sinking fund. It is sensible, clear and workable for the person responsible for the upkeep and maintenance of the building also to be responsible for any sinking fund. Separating this responsibility would create conflict and confusion with the existing lease, as would trying to dovetail separate responsibilities with the existing arrangements. Importantly, legislation enables the freeholder to be held to account on service charges, including any sinking fund. Leaseholders have the right to challenge the reasonableness of service charge amounts being sought, whether for day-to- day use or towards a sinking fund.
My noble friend raised the matter of a sinking fund and those with very small incomes, which is a fair point. Additional payments into sinking funds could be extremely difficult for those on small fixed incomes  and it would not be right to force them to have a sinking fund if it was not already implicit in the lease when the funds may not be needed immediately or for many years.
I should like to address a matter that was raised by the noble Earl, Lord Lytton. He said that you cannot get an agreement from absentee freeholders or leaseholders. But if there is no sinking fund or any lease variation and leaseholders cannot get agreement, they can go to the First-tier Tribunal. I hope that reassures him.

Lord Campbell-Savours: My Lords, a particular problem arises which I do not think has been dealt with in the legislation. It is where leaseholders go into arrears and the cost of carrying those leaseholders who are in arrears is borne by the other leaseholders in the block. I wonder whether Ministers might ask civil servants to consider this area because it is an escalating problem, particularly in London where a large number of apartments in blocks of flats are owned by leaseholders who live overseas and often do not fulfil their responsibilities here in the United Kingdom. Even though this problem is not covered in the legislation, maybe officials in the Minister’s department could look at it and come back to us at some future stage.

Viscount Younger of Leckie: The noble Lord, Lord Campbell-Savours, was extremely helpful in debates on this matter in Committee and he raises an important point. That leads me to say that, as a result of this debate and the debate in Committee, we now want to work closely with my noble friend Lady Gardner and all those interested in the sector to consider the complexities of these detailed issues. We need to balance the rights of all parties and consider how well the existing routes to push necessary repairs or vary leases work through the First-tier Tribunal and look at how all the aspects are working. I would like, with the Minister, to meet my noble friend Lady Gardner to discuss this issue, and I am sure that all noble Lords who have taken part in this debate would be most welcome to attend. I hope that, with my assurance to take these issues forward and look at the complexities, my noble friend will feel able to withdraw her amendment.

Lord Kennedy of Southwark: If the House will indulge me, that offer is welcome, but it is fair to say that no one could accuse either this Government or previous Governments going back many years of any haste in dealing with these matters. I hope that we shall finally see some progress.

Baroness Gardner of Parkes: My Lords, the comments that have been made are very interesting and I am grateful to all those who have given their support. However, we tend to overlook the fact that there are now something like 6 million leaseholders, so we are not talking about a little subject. It is a pretty big one that is important to a great many people. It cannot just be brushed aside as something that it would be nice to do.
I would love to see a completely new consolidation Act for all property issues; I raised this at a meeting where I was asked to give a speech. I said that people  should write to their MPs and press for one. A man who said he was a member of the Law Commission made it clear that the commission does nothing for nothing now, so the only way you could get it to prepare a consolidation Act, which it often used to do in the past, is by pre-paying for it. Some Government must decide that it is time to put all property legislation, which keeps a lot of solicitors happily and expensively employed referring to Act after Act with each one changing the previous one, into one Act. It is all piecemeal and there is no cohesion. Those 6 million leaseholders and the multiplicity of legislation are big problems for us.
The noble Lord, Lord Kennedy, said that this might well be a growing problem, and I think he is right. Foreign ownership and the fact that so many people are having to move out of London because service charges are too high are the reasons for these issues. What the Minister had to say was very good, but he has not really given an indication that he will say anything before Third Reading, which is coming up pretty soon. What I would like to hear from him is that he will look at another approach, either through regulations or in some other way, to deal with this. That, at least, would put his good intentions on the record. As I say, it is important that these issues are not just pushed aside, which has been the case too many times when I have raised them. This basically applies to the situation as set out in Amendment 101.
With Amendment 102 on the sinking funds, I refer to the situation to help people who will, under this Bill, become owners of properties that will require some sort of control, particularly if they are in blocks of flats rather than houses. If they are houses you can deal with it or let it collapse internally if you want to, but in a block of flats your flat will affect everyone else in the whole block. If things were seriously let go and water was pouring everywhere, everyone would be affected.
The sinking fund for new properties to be sold under the Bill should be a feature of all the leases from day one. It should not be a case of looking at it 30 years later and saying, “We should’ve done something”. The woman I mentioned on a total income of £10,000 thought that she would not be able to put aside even £1 a week towards it. However, if you had this fund right from the start and there was some particular little amount built in, it would build up over years. That woman had been in her property for 30 years. Over 30 years something would have built up to help her meet the bills.
As I said, there are so many reasons for people not to vote—perhaps self-interest or a total lack of interest. There are lots of reasons, but we need to deal with that percentage of people who do not vote at all. I would like more confirmation from my noble friend that he intends to look at that. He says that leaseholders have the right to challenge. That is all very well, but on the right to challenge under the leasehold valuation tribunal, I fought hard to retain that you could be charged a maximum of £500; it is now £500 to walk in the door. It was always acknowledged that the first property chamber was big money and not to be taken lightly.
There needs to be a greater understanding of all these things. There needs to be more comment from the Minister. I do not know whether he will answer these points separately, but I would like more assurance that the Government seriously intend looking at this with a view to really helping the 6 million leaseholders.

Viscount Younger of Leckie: I hope I have reassured my noble friend that we want to look not just at the content of these two amendments to address these and related issues—the Minister, my noble friend Lady Williams, has been nodding her head. It is also clear from this short debate that we are not in total agreement on how these matters should be tackled. The noble Lords, Lord Campbell-Savours and Lord Kennedy, had some views and I respect the views of my noble friend Lady Gardner, but it tells us that we are not ready to rush into legislation on these important matters. I hope my noble friend will agree that it is right to take these matters outside the Chamber and have a thorough discussion.

Baroness Gardner of Parkes: Is my noble friend saying that it might be possible to deal with these issues through variations in regulations? If so, is he prepared to look at that?

Viscount Younger of Leckie: I did not say that and I would not want to give any guarantees before Third Reading, but I have guaranteed to meet my noble friend the Minister outside the Chamber to look into these issues.

Baroness Gardner of Parkes: It sounds as if there is a bit more interest than there often is on this subject. People have been excellent in clarifying and supporting this. We heard the technical side from the noble Earl, Lord Lytton, which is very valuable—think of what you would pay for his professional opinion on that; we have had the benefit of it for nothing. The Minister is well intentioned, as was my noble friend in responding. On that basis, this is too big an issue to try to put into the Bill, which is already enormous, but it must not be overlooked. We must come back to it. For that reason, I beg leave to withdraw the amendment.
Amendment 101 withdrawn.
Amendment 102 not moved.

Amendment 102ZA
Moved by Baroness Parminter
102ZA: After Clause 128, insert the following new Clause—“Neighbourhood right of appeal(1) After section 78 of the Town and Country Planning Act 1990 (“the 1990 Act”) insert—“78ZA Neighbourhood right of appeal(1) Where—(a) a planning authority grants an application for planning permission,(b) the application does not accord with policies in an emerging or made neighbourhood plan in which the land to which the application relates is situated, and(c) the neighbourhood plan under paragraph (b) contains proposals for the provision of housing development,  certain persons as specified in subsection (2) may by notice appeal to the Secretary of State.(2) Persons who may by notice appeal to the Secretary of State against the approval of planning permission in the circumstances specified in subsection (1) are any parish council or neighbourhood forum, as defined in section 61F of the 1990 Act (authorisation to act in relation to neighbourhood areas), whose made or emerging neighbourhood plan includes all or part of the area of land to which the application relates, by two-thirds majority voting.(3) In this section an “emerging” neighbourhood plan means a neighbourhood plan that—(a) has been examined,(b) is being examined, or(c) is due to be examined, having met the public consultation requirements necessary to proceed to this stage.”(2) Section 79 of the 1990 Act is amended as follows—(a) in subsection (2), omit “either”, and after “planning authority” insert “or the applicant (where different from the appellant)”;(b) in subsection (6), after “the determination” insert “(except for appeals as defined in section 78ZA (as inserted by section (Neighbourhood right of appeal) of the Housing and Planning Act 2016) and where the appellant is as defined in subsection (2) of that section)”.”

Baroness Parminter: My Lords, in Committee there was widespread support for the measures of both this Government and the coalition Government to devolve powers to local communities, particularly through neighbourhood planning. We know that neighbourhood planning delivers more homes—the Government’s own figures confirm it—so how can it be right for local people to have no redress when a planning application is approved which drives a coach and horses through everything they have worked tirelessly to achieve in their neighbourhood plan?
The Minister confirmed in Committee that 1,800 neighbourhood plans had come into the early stages of development and that about 120 had been brought into force, but the total number that we could be looking at is 9,000. Why, bluntly, should local people go to the effort of producing a neighbourhood plan if such plans can be ignored when councils make decisions on planning applications and the opportunity to challenge is through costly judicial reviews?
The Minister said in Committee that this amendment was not necessary because the Secretary of State can recover planning appeals, but at that stage I highlighted three things. First, that power applies only when the permission has been refused by the local authority and subsequently taken to appeal. Secondly, it applies only to major applications while, particularly in rural areas, it can be the smaller sites of up to nine homes which need very careful planning to ensure that we get those types of development which have the support of local communities. Finally, the recovery available to the Secretary of State provides no protection for communities when the permission has been granted by local authorities contrary to a neighbourhood plan.
This amendment, in my name and those of the noble Lord, Lord Kennedy of Southwark, and my noble friend Lord Taylor of Goss Moor, creates a  limited right of appeal. I am sorry to see that the noble Lord, Lord True, is not in his place today, but we debated this point in Committee. This is a limited right only for parish councils and neighbourhood forums, not for individuals, and it would enable them to appeal against the granting of permission only for new housing that conflicts with their made or well-advanced neighbourhood plan. It is a limited right supported by the House of Lords Committee on National Policy for the Built Environment, on which I was privileged to serve earlier this year, and by the CPRE, Civic Voice and NALC, three organisations that do so much to ensure that more people are involved in planning, helping to ensure that we get consensus around planning and thus help us to deliver the additional homes that we know we need. I beg to move.

Lord Best: My Lords, I support this amendment, to which I spoke at greater length in Committee. I shall summarise my earlier points. This proposal for a parish council or neighbourhood to be able to appeal against a planning approval that cuts across an emerging neighbourhood plan was raised in the other place by Nick Herbert MP, with support from Sir Oliver Heald MP and Andrew Bingham MP, all Conservative Members, whose views were shared by Dr Roberta Blackman-Woods MP for the Opposition. Mr Nick Herbert said,
“speculative developers try to get in applications ahead of the completion of neighbourhood plans or even after they have been completed … either they are upheld by the local authority, which is fearful of losing an appeal, or the developer makes an appeal that is upheld by the planning inspector. The development is then allowed to go ahead”.
This totally undermines all the hard work of the volunteers who have spent endless hours gaining support for the neighbourhood plan before, to quote Sir Oliver Heald, it is,
“trashed by an application by a speculative developer ”.—[Official Report, Commons, 5/1/16; col. 222.]
This is a deficiency in the otherwise sensible arrangements for neighbourhood forums and plans which were devised and introduced by Greg Clark, now the Secretary of State for Communities and Local Government.
I have declared my interest in the excellent neighbourhood plan for the Cerne Valley in Dorset, where I own some land within the area covered by the plan. I followed the progress of the local volunteers who brought together this neighbourhood plan from the summer of 2011 until its approval in a public referendum on the plan in January 2015. The nerve-racking hazard facing all the local people involved was that their hard work was at risk from a developer putting in an application which in no way accorded with the emerging neighbourhood plan. Had this happened, neither the parish council or the neighbourhood forum would have had any way of appealing and the council itself would not have been able to use the neighbourhood plan to determine the planning application until the referendum on it was done and dusted. For all the 1,800 neighbourhood forums currently preparing neighbourhood plans, and all those to come— the noble Baroness, Lady Parminter, tells us that 9,000 could come down this route, and I hope there will be many more—this amendment would overcome the problem.
If the Minister wanted to modify this amendment so that the neighbourhood right of appeal applied only once the emerging neighbourhood plan had reached a later point in its progress—as was suggested earlier by some noble Lords—I feel sure that this would be acceptable to the proposers. I hope that the Minister will indicate a move in this direction. I support this amendment.

Lord Shipley: My Lords, I support this amendment. Noble Lords may recall that we had two different amendments in Committee. Although they were different, they had a very similar intent. We now have one amendment supported by the National Association of Local Councils and Civic Voice. I hope that the Minister will understand the importance of this, because if we are to encourage groups, parish councils and neighbourhood forums to create neighbourhood plans, they have to feel that the effort being put in is worth while.
As we have heard, neighbourhood planning is growing in strength. However, missing from the statutory powers of those bodies with neighbourhood plans is that right of appeal for a neighbourhood planning body against the granting of a planning permission by a local authority which conflicts with that neighbourhood plan, whether it is in place or well on the way to being approved. Of course, as Amendment 102ZA makes clear, the right of appeal would apply only in relation to housing.
We have heard that this amendment has broad cross-party support. I hope that the Government will understand the need to support it as the power to overrule a neighbourhood plan would be a serious disincentive to all those bodies—up to 9,000, apparently —that are considering introducing neighbourhood plans, given that only a little over 100 have actually been put in place.
The amendment is limited to the powers of a parish council or a neighbourhood forum. As such, I agree entirely with what previous noble Lords have said—namely, that this is a reasonable proposal. If we want to give a boost to neighbourhood planning, it should be supported by the Government.

Earl of Lytton: My Lords, I, too, support this amendment. In doing so, I declare two interests, one of which I have already declared—namely, that I am a practising chartered surveyor. As a matter of course in my work, I advise owners of land with potential development sites, some of them on the edges of rural villages. I also declare my now past status as a former president of the National Association of Local Councils, which strongly supports this amendment.
It seems an entirely incontestable proposition that a neighbourhood plan duly made—and therefore a robust representation of locally expressed views in accordance with the local plan—and which is a true reflection of national policy and the government agenda through that local plan process, should be defendable in the event of the circumstances arising set out in this amendment: namely, the very limited circumstances in which the principal authority does not itself wish to pursue this, in which case the neighbourhood can deal with the matter itself. If the contrary view is to prevail, what is the point of having a process of neighbourhood  plan and devolving responsibilities if the neighbourhood cannot take advantage of such a facility—the point made by the noble Lord, Lord Shipley?
On that basis, I support the amendment. It is, as I said, strongly supported by the National Association of Local Councils, which is the parent body of parish and town councils. My only slight reservation, which I have explained to the noble Baroness, Lady Parminter, is the definition of “emerging”, as set out in the amendment. It is technically possible—although I understand that it has not been the experience to date in the work done by NALC or within the department itself—for a relatively ill-formulated or poorly community-canvassed neighbourhood plan process to be “emerging”, to use that term of art.
I would tend to the view that the examination part of the test of emergence should already have taken place and the neighbourhood plan should have been found to be sound by that independent examiner. However, I am reassured on the potential for misuse by two other factors, namely that the risks consequential on the independent examiner rejecting a poor neighbourhood plan are significant and, furthermore, that the costs likely to be visited on the neighbourhood through making an appeal are matters that should be carefully considered beforehand. I am entirely unclear as to exactly how those costs end up being funded; that is something for another day. In addition, the possible extra costs in the event of a developer not only winning an appeal because of the neighbourhood plan’s lack of robustness but successfully then claiming its own costs as part of such an appeal should be an extremely sobering thought for any neighbourhood or parish wishing to embark on this process.
The Government should not seek to micromanage the neighbourhood plan process. As we have heard already, there needs to be proper motivation for it to succeed but, at the same time, the risks should be understood and shouldered, otherwise we will not have robust and correctly formulated neighbourhood plans. That after all is key, but the risks are real. It is a commonly held belief among developers of my acquaintance that, in terms of the volume ultimately and collectively created to meet the Government’s targets on new housing rollout, a suite of smaller sites in villages and town fringes may be preferable to the larger strategic sites, which have an infrastructure threshold cost and potentially constrained build-out rates. By “constrained build-out rates”, I mean that a large quantity of housing coming from one particular strategic site ultimately risks flooding its immediate local market as, by dint of economic and market circumstances, the build-out rates are essentially constrained. The belief is that having a much broader suite of different developers, different styles of property and different locations is key to the bulk rolling-out of the Government’s housing targets.
If the noble Baroness decides to test the opinion of the House, I shall vote with her, but I hope that the noble Baroness, Lady Evans—or perhaps the noble Baroness, Lady Williams, herself—might comment on my reservations about precisely how the question of emerging neighbourhood plans will be dealt with.

Lord Marlesford: My Lords, I support this important amendment. It is important because we are talking about the grassroots of democracy. I believe that the Conservative Party supports the grassroots of democracy but it must demonstrate that it is prepared to encourage, listen to and respect them. There is no point in saying that they do not matter and that an outside developer has a pre-emption to overrule local opinion. Almost by definition, local opinion is well-informed. It may be controversial but it sorts itself out at the grassroots and it is most important that we support this amendment, or something very like it. The Government may have different views but it is a very limited and modest amendment.
The role of parish councils in the planning system, supported by neighbourhood plans, is extremely important. First, that is because they are local and have people who know what it is all about; secondly, they are an important factor in the integrity of a planning system. I should declare that I am chairman of the Marlesford parish council. An important aspect of the planning system is that elected councillors on planning authorities have time to consider only very few planning applications, most of which are passed on the nod. Many years ago, when I was on Suffolk County Council, we had two lists: list A and list B. The meetings were never long enough to consider those on list A, which is the one we were invited to consider, and in practice we had to pass those on list B on the nod. I remember saying to myself, “If I really wanted to get something through, whatever local councillors might think, if I could get it on to list B I would be home and dry”. Parish councils are therefore an important safety check, not just in terms of expressing local views on proposals but in ensuring the integrity of the planning system. The sort of provision proposed by the noble Baroness is therefore an important step and I hope the Government will look sympathetically at doing something along these lines.

Lord Porter of Spalding: My Lords, I had not intended to speak to these amendments and I do not really want to, but I need to refute the claims that councils pass planning applications on the nod. The vast majority of planning applications are quite clearly policy-compliant, which is why almost nine out of 10 are granted. They are not passed on the nod but passed by delegated powers because they are planning-compliant. The ones that are controversial either locally or, more importantly, because they are not policy-compliant will be the ones dealt with in planning committees, which do not need to see all the planning applications. They need to have faith in the professionally trained planning officers to be able to work to policy-compliant applications. I just do not want any of your Lordships to be under any misapprehension that councils pass planning applications on the nod.

Lord Berkeley of Knighton: My Lords, if I might share just one thought with the Minister, does this amendment not chime nicely with the Government’s oft-stated desire to empower local communities at grassroots level, as we have heard, and to give them a voice in these contentious planning decisions? The Government seem to have talked quite a lot about this in recent months and in building up to the election.

Lord Kennedy of Southwark: My Lords, this issue was debated during consideration in Committee. I support the devolution of power to local communities and we should seek to achieve it wherever possible. I have advised the House before that I am a councillor in the London Borough of Lewisham and a member of the planning committee—I am going there tomorrow night. The ward which I represent is Crofton Park, where we are in the process of developing a neighbourhood plan. As noble Lords have said, that is not an easy process. It takes quite a long time and we are hopeful of getting to a point where we can put it to the vote in a ballot of local residents. But it is a complicated matter and a lots of work needs to be done. It is right that communities have a direct say in developments in their area, and the amendment provides a mechanism for a limited right of appeal in certain circumstances. The right of appeal would apply only to parish councils and neighbourhood forums whose plans progress to formal submission to the local authority.
We need to strike the right balance here, and that is often difficult to achieve. It could be suggested that objections could be raised just to stop developments, which is a fair point, but the amendment allows for appeals only in a fairly limited range of circumstances, at the risk of costs being awarded by a planning inspector if anyone made a vexatious appeal. The amendment is an attempt to strike the right balance. I am happy to support it, but I also accept the points made by the noble Lord, Lord Best, and the noble Earl, Lord Lytton.

Baroness Evans of Bowes Park: My Lords, Amendment 102ZA has enabled us to revisit our discussion on a proposed community right to appeal where there is an emerging or made neighbourhood plan, and I thank all noble Lords who have contributed today. Although I appreciate the intention behind the amendment, I cannot accept it and will explain why.
We have a long-established and much-valued right of appeal. It recognises that the planning system acts as a control on how an individual may use their land. This existing right of appeal serves an important purpose—to compensate for the removal of the individual’s right to develop—and there is no need to change this fundamental principle. That is because communities are integral to and involved in the whole planning process. They are consulted on the preparation of the local plan for their area from the earliest stages, through to making representations to be considered at the independent examination. The right of every community to produce a neighbourhood plan takes this further, allowing communities to set their own planning policies for the area. Those are the basis for decisions on planning applications and guide how the neighbourhood develops.
Importantly, communities can make representations on individual planning applications and appeals, and the Bill and new regulations will provide neighbourhood forums with the right to request notification of applications in their area, alongside being statutory consultees on their area’s local plan. The views of the community are considered at every stage in the decision-making process. Given all the opportunities that already exist,  the Government do not believe that a community right of appeal is necessary.
It cannot be right for development that secures planning permission to be delayed and uncertainty created at the last minute by a community right of appeal. The amendment would serve only to discourage people from getting involved in the planning process earlier, or lead to repeated consideration of issues raised and addressed during the planning application process.
To reinforce what I said in Committee, decisions on planning applications must be made in accordance with the development plan, unless material considerations indicate otherwise. A made neighbourhood plan is part of the development plan and therefore already a powerful tool that must be the starting point for the authority’s decisions on applications. National policy is very clear: proposals that conflict with a neighbourhood plan that has been brought into force should not normally be approved.
We have also made it clear that an emerging neighbourhood plan can be a material consideration in planning decisions, including where there is a lack of five-year housing land supply in the local authority area. Decision-takers may give weight to relevant policies in emerging plans according to the stage that the emerging plan has reached, the extent to which there are unresolved objections, and the degree of consistency with the National Planning Policy Framework. The extent of local support should also be taken into account. I also remind the House that in January, we announced that for a further six months, the Secretary of State’s criteria to recover and decide planning appeals would continue to include housing proposals in those areas where there is a made or submitted neighbourhood plan.
We have a planning system that balances competing demands for growth and protection. We have asked local planning authorities to balance these competing considerations to deliver sustainable development. We must now allow them get on with the job. For these reasons, I hope that noble Lords will not press their amendments.

Baroness Parminter: I thank the Minister for that reply and for the support we have had from right round the House, which was very telling. The response from the Front Bench opposite was disappointing, although not surprising. What the noble Lord, Lord Kennedy, said about striking the right balance was right; in planning, that is what it is all about. We need to ensure that local people are fully engaged in planning opportunities so that we build consensus and actually get the development we need. That is why we all support neighbourhood planning, but why there is a real need now for this limited right of appeal just for parish councils and neighbourhood forums.
I am delighted that by the end of his remarks the noble Earl, Lord Lytton, was reassured in support of this limited right. In proposing the amendment, we made the case for both made neighbourhood plans and those which are at least at the point for submission to local authorities for their examination. I accept that  there is always a question mark about where you draw the line, but at that point those volunteers have done all the work—and that seemed to me the right place to put the line in the sand.
On the basis that this House believes in neighbourhood planning, wants more homes and cannot understand why a Government whose Bill is all about needing more homes are not prepared to accept the amendment, I wish to test the opinion of the House.

Amendment 102A
Moved by Viscount Younger of Leckie
102A: Clause 129, page 62, line 41, leave out “in subsection (4)” and insert “before subsection (4) insert—“(3A) If a local planning authority have not prepared a local development scheme, the Secretary of State or the Mayor of London may—(a) prepare a local development scheme for the authority, and(b) direct the authority to bring that scheme into effect.”( ) In subsections (4) and (8AA) of that section”

Viscount Younger of Leckie: My Lords, throughout this Bill we have discussed the importance of local plans in setting out the vision for a local area and providing certainty to communities and businesses as to where new homes and other development will go. Local planning authorities are required to prepare and maintain a local development scheme. This sets out the development plan documents—the documents that make up a local plan—that an authority intends to produce and the timetable for producing them. Existing powers enable the Secretary of State, or the Mayor of London where the local planning authority is a London borough, to direct a local planning authority to make amendments to their local development scheme. Clause 129 amends that power to ensure that the Secretary of State can direct amendments that relate to both the subject matter and geographical coverage of the documents specified in the scheme.
I propose minor amendments to Clause 129 to enable the Secretary of State to prepare a local development scheme for a local planning authority and to direct an authority to bring that scheme into effect. The amendments ensure that where an authority has failed to set out publicly its intention to produce a local plan and indeed a timetable for doing so, we can take action and provide certainty for all communities that a plan for their area will be prepared and that they will have an opportunity to get involved in the plan-making process. I beg to move.

Lord Stunell: My Lords, I should like to ask the Minister some questions about the application of this innocuous amendment, as he has described it. It is  not that innocuous because it is a power to take over the local plan process and to state that a local authority must adopt the plan that has been prepared for it.
To give the House a little background, in 2010 the information I was given as a Minister was that around 26% of local authorities had a local plan and 74% did not. That was a large proportion, bearing in mind that all authorities—

Lord Lansley: I am grateful to the noble Lord for giving way. I am trying to follow this amendment and the debate on it. I understood a local development scheme to be a description on the part of the local authority of how it is going to go about the process of creating its local development plan, not the local development plan itself. To that extent, the amendment, while not technical, in effect takes over, where a local authority has failed to say that it will undertake the process of local development plan preparation, to put a scheme in place for that to happen, but as a consequence of that it does not take over the plan-making process itself.

Lord Stunell: My Lords, it will be interesting to see whether the Minister takes that as being the basis of this proposal. It does not appear to be when one looks at the explanation of the Bill, nor at that of the impact assessment in relation to Clause 129 and its intention, nor does the amendment appear to adopt that methodology. However, if the noble Lord, Lord Lansley, is correct, then some of my points are perhaps of lesser force. Nevertheless, I think there are still some important points to make clear to the House.
Faced with the reality that 74% of local planning authorities had not adopted plans in 2010, the Government put in place the National Planning Policy Framework with the very clear intention that, in the absence or in the default of a local plan, the NPPF would be the document that could and should be used by planners and developers when approaching applications in their area. There was considerable upset among local planning authorities when they saw this provision, and the final version of the NPPF allowed a period of grace. There was of course a risk to local authorities in not having plans, which was that they would be forced to accept applications that they believed were not in the best interests of their area and which had not been consulted on with local communities.
I am happy to report, and I think this is in the material provided by the Government in the impact assessment, that we are now in the position that rather than 74% of local authorities not having plans, only 18% do not, so there has been a huge upsurge in the number of local plans that have been brought forward and come to fruition. That has undoubtedly been driven by the introduction of the NPPF and local authorities’ fear that if they dragged their feet further, they would lose control of the process.
It is worth remembering that within the 18% that have not yet produced plans, there will be many areas where one or other of the 1,800 neighbourhood plans, which the noble Baroness, Lady Parminter, referred to in the previous debate, will be brought forward, so there will be neighbourhood plans being prepared and maybe even approved in some of the areas where at present there is no approved plan.
Regarding Clause 129, the impact assessment says that one of the problems with the existing powers, which this provision replaces, is that although the Secretary of State already has a power to take over the process, if he does so, he has to take it over lock, stock and barrel, without exception, from A to Z. The impact assessment implies that the existing power is too big a stick and too disproportionate, so it has not been used. It argues—although these are not the words used—that rather than a great big stick, a smaller stick is needed, as that would be more useful to the Secretary of State in getting the required result. In fact, the proposed power is very wide ranging and far from being a smaller stick.
I draw to noble Lords’ attention the fact that the process set out here is an anti-localism process which will lead to local authorities losing control of the planning process which is at the heart of the localism agenda. It is also unnecessary because of the progress that has been made since the introduction of the NPPF and the threat that is hanging over local authorities that developers’ applications will be judged on the NPPF criteria if there is not a local plan. Local authorities have a very strong incentive to act at the moment. It clearly is working as a number of authorities have reacted and the shortfall has reduced from 74% to 18%. In any case, there is also the existing power which the impact assessment sets out, as well as a reserve power, so that a local planning authority that fails to fulfil its statutory requirement to start the local plan process can be challenged in court. This is therefore a sledgehammer to crack a nut.
Will the Minister also address the issue of what will trigger this power? As it appears in the Marshalled List, the amendment is in the present tense:
“If a local planning authority have not prepared a local development scheme, the Secretary of State … may”.
What is the trigger? When is the “now” of the provision? Will it be when the Bill receives Royal Assent or at some other date? There is some uncertainty about the starting point for the provision.
The provision might be ineffective in any event. How long will it take the Secretary of State to draw up local plans? Where is the capacity to do it? What is the timescale? How will local consultation work? One wonders about the operation of a public inquiry process where the local planning authority is the lead objector to the plan because it opposes what the plan projects. I cannot see how that would achieve certainty or the development of more homes more quickly than would the current process and mechanisms.
There is more to be done to get more housing. Later, there will be a debate on the amendment in the name of the noble Lord, Lord True, which would make sure that land held by government departments within local authority areas is held more transparently and brought back into use more quickly. That is direct action that the Minister could take without interfering with the existing planning process. The amendment proposed does not seem proportionate, wise or deliverable, and I look forward to hearing the Minister’s response to the serious objections to it.

Lord Kennedy of Southwark: My Lords, can the noble Viscount, Lord Younger, say a little more about these amendments? As has been said, on the face of it they could be interpreted as giving considerable power to the Secretary of State or the Mayor of London. Can the Minister also confirm that in the case of London they will be exercised only by the Mayor of London and will not be exercised by the Secretary of State as well? Can he also explain further, as the noble Lord, Lord Stunell, outlined, what he sees are the circumstances when the use of such powers would need to be considered, and can he tell us, for the benefit of the House, how they complement localism? It seems that localism is spoken of less and less from the Government Benches as we discuss these Bills and these issues. The noble Lord, Lord Stunell, outlined very carefully a number of very detailed questions and I look forward to hearing the Minister’s response to those as well.

Viscount Younger of Leckie: My Lords, I thank noble Lords for their interventions in this very short debate. I hope that I will be able to address the questions raised by the noble Lord, Lord Stunell, in particular, and the noble Lord, Lord Kennedy.
First, as regards statistics—my noble friend Lord Lansley raised this issue—the majority of authorities already have a plan in place or are working on their plan. Some 70% of local authorities—the figure I have—have adopted a local plan and 84% have published a plan. The point is that where an authority is not making sufficient progress on its plan, we have been clear that we will step in—but in consultation with local people. The whole aim is to accelerate getting a plan in place. Parliament has already given the Secretary of State the power to intervene in local plan-making, so to this extent we are not doing anything new.
The Bill allows targeted intervention in plans and keeps decision-making local wherever possible while still ensuring that plans are in place. This amendment ensures that where an authority has failed to set out publicly its intention and timetable for producing a local plan, we can take action to make this information available to communities. I should also try to reassure the noble Lord, Lord Stunell, that we are talking about quite a long time that local authorities have had to put a plan in place. They have had more than a decade to get their plans in place, so I regard this as being very much a last-resort issue. It is meant to be light-touch rather than bringing in a sledgehammer to crack a nut—and I hope that may help.
To go a little further, the noble Lord, Lord Stunell, raised the issue of the timing as to where and when the Secretary of State might intervene. We have consulted—

Lord Lansley: For the purposes of clarification, can my noble friend be very clear about this? The amendment we are debating is about a power for the Secretary of State or the mayor, where appropriate, to take over and direct that their local authority should have a local development scheme. It is not taking over the plan-making process itself, and that is a very important distinction. I am afraid that the speech of the noble Lord, Lord Stunell, was predicated on it being the taking over of the plan-making process.

Viscount Younger of Leckie: That is absolutely correct. If it had not be clarified before, it must be clarified. It is simply a means of taking over the plan-making process, not taking over the whole plan for good—that is a very important point.
We set out our proposals for prioritised intervention, where the least progress in plan-making has been made. Where policies and plans have not been kept up to date and there is higher housing pressure, for example, intervention will have the greatest impact in accelerating local plan production. To finish on that note, the fact is that where nothing is being done, it is right that as a last resort there should be government intervention. I hope that that will reassure the noble Lord, Lord Stunell, and the noble Lord, Lord Kennedy.

Lord Kennedy of Southwark: Can the noble Lord give us more information about where these areas are? Clearly he must have a list of what is going on, as the Government have clearly done some work on this.

Viscount Younger of Leckie: I can certainly write to the noble Lord with that specific detail, but, clearly, we are very wise to the fact that some local authorities have not produced a plan, and therefore we want to be sure to encourage them to do so. We are bringing in the encouragement and the nudge factor here, not the sledgehammer.
Amendment 102A agreed.

Amendment 102B
Moved by Viscount Younger of Leckie
102B: Clause 129, page 62, line 43, at end insert—“( ) In subsections (4A)(a), (5), (6), (6A) and (6B)(a) of that section, after “under subsection” insert “(3A) or”.”
Amendment 102B agreed.

  
Clause 136: Permission in principle for development of land

Amendment 102C
Moved by Lord Beecham
102C: Clause 136, page 67, line 6, after “for” insert “housing led”

Lord Beecham: My Lords, the declared aim of the Government’s promotion of the concept of permission in principle was to facilitate the building of homes, especially on brownfield sites. This objective is all the more compelling in the light of today’s news that the number of housing starts in the first quarter of this year was the lowest in three years—while of course we still have several hundred thousand sites with planning permission that has not been activated.
For ideological reasons, the Government rely almost entirely on the private sector and building for sale, whereas I recall that 50 years ago Newcastle City Council alone was building 3,000 new council homes in a year. Perhaps the Government should reconsider their hostility to the provision of social housing and do something to redress the balance.
However, leaving history aside, it was reassuring to hear the Minister affirm in Committee on 22 March:
“We are currently consulting on an approach that would enable permission in principle to be granted for housing-led development to allow for the possibility of mixed uses that are compatible with a residential environment. This means that as long as a site allocation is housing-led, local authorities will be able to grant permission in principle in line with local and national policy for other uses”.
In reply to my question at the time as to whether there would be a definition in guidance about what “housing led” actually means in terms of the proportion of sites, she confirmed that there would, and she gave the example that it might include retail, community and office space, saying:
“This approach is absolutely crucial to continuing to promote sustainable development and the delivery of balanced, mixed communities, spaces and places”.—[Official Report, 22/3/16; col. 2281.]
This reflected the statement in paragraph 402 of the Explanatory Notes to the Bill that the uses “must be housing led”.
The Opposition and, I suspect, most other Members of the House entirely support that approach, which is reiterated in the department’s policy factsheet, which states explicitly:
“The Bill will allow permission in principle to be granted when local authorities or neighbourhood groups choose to allocate housing-led development in future local and neighbourhood plans or identify it on brownfield registers”.
However, a different picture emerged in the Government’s response last week to the 26th report of the Delegated Powers and Regulatory Reform Committee. Paragraph 35 of the reply confirms:
“The Committee is right to emphasise that this measure will facilitate the building of vital new housing, by allowing permission in principle to be granted for housing-led development. That is, development that contains an element of housing but which can also include other compatible uses in the interests of encouraging mixed use and sustainable development”.
That sentence alone prompts a degree of suspicion. Housing-led development now appears to be defined as development containing only “an element”—unquantified—of housing.
That some mysterious alchemy continues to be at work is confirmed by the contents of paragraph 36, in which the Minister proclaims that,
“I consider it to be reasonable … for other uses, such as retail or commercial space, where there is no housing element. There is no restriction on the types of development for which full or outline planning permission may be granted”.
Paragraph 37 goes on to say that amendments will, however, be tabled—as they have been—to exclude “fracking or mineral development”. Welcome though that latter position is, we now have a permission-in-principle cocktail in which the ingredient of housing development can be reduced to homeopathic proportions or even be excluded altogether.
I am sure that the Minister did not deliberately mislead the House. We all know how hard she has struggled to explain and defend this dreadful Bill and the way in which it comes to us, laden with promises of future consultations and government responses in the form of reams of secondary legislation, none of which Parliament will have seen before the Bill becomes law. It is not her fault that the timetable results in Delegated  Powers Committee’s reports, intensely critical as they are of the process, reaching us a day before matters are debated on Report.
But the position now in respect of permission in principle and the necessary involvement of housing is completely unacceptable. The amendments in this group are designed simply to enshrine in legislation what the Government told us were the Bill’s intentions—namely, to facilitate the provision of desperately needed new homes in, to use their own words, “housing-led development”. All the amendments seek to do is to hold the Government to their originally declared policy, which they appear to have changed, possibly without the Minister even noticing.
I therefore commend the amendments in my name and, in particular, Amendments 102C and 102D, which make it clear that permission in principle is to be for housing-led development—by which it is clear that I do not mean exclusively housing development. In Amendment 102D the permission in principle is for the development of brownfield land for that purpose. I beg to move.

Lord Shipley: My Lords, I support this group of amendments for the simple reason that the point made so ably by the noble Lord, Lord Beecham, should be in the Bill.
When I saw these further amendments, I returned to the Hansard report of Committee. I refer to col. 2330, where my noble friend Lord Greaves had initiated a debate on whether Clause 136 should stand part of the Bill and raised the question of what permission in principle should be for. He said:
“We are told that permission in principle is just for housing ... There may be other things associated with housing development, such as shops or local offices, but so long as it is housing led that is okay”.
I will quote entirely what the Minister said in reply. She said:
“I confirm to the noble Lord that it would have to be categorised as housing-led development. For permission in principle to be granted, it would have to be categorised by size, location and type of development. I hope that reassures the noble Lord”.—[Official Report, 22/3/16; col. 2330.]
But of course, as the noble Lord, Lord Beecham, made clear, it is not quite as simple as that. The problem we have is the one we have had throughout the Bill, which is that it is a skeleton Bill. It does not have detail, much of which is to be presented in the form of regulations through either the negative or the affirmative procedure. These three amendments would make the matter absolutely clear. Line 6 on page 67 of the Bill says:
“Permission in principle may be granted for development of land in England as provided in section 59A”.
Reading on, I do not see the word “housing” appear anywhere. The amendments would alter the wording to, “Permission in principle may be granted for housing led development of brownfield land for housing in England as provided in section 59A”. That seems so much clearer. I think that that is the Government’s intention but I do not think that a matter of such fundamental importance should be left off the face of the Bill. I therefore strongly support the amendment moved by the noble Lord, Lord Beecham.

Baroness Andrews: My Lords, my noble friend has done the House a service in identifying what is at the very least something of a confusion and by quoting various paragraphs from reports and policy statements. There may even be a contradiction in the policy. As my noble friend and the noble Lord have said, the whole justification for the policy was that we faced a housing crisis of such proportions that a new fast-track approach to commandeering brownfield sites needed to be introduced through permission in principle. In my view, that breaks most of the rules for decent planning and healthy communities, but it was justified because of the scale of the housing developments that are so urgently needed.
Our contention has been that this is reflected in later amendments on sustainability, for example, and that yesterday’s mistakes in terms of the awful housing estates that were built without any thought being given to what communities needed to thrive should not be repeated. Therefore, proper attention, full information and provision should be made to ensure that housing developments, as planned, are served properly by infrastructure and green space. That has been much of our concern at previous stages of the Bill. There was no indication that these could be anything other than housing-led, so the possibility that has been raised by paragraph 36 of the Select Committee report, which has been quoted, is extremely significant. What was in the Minister’s mind, or that of the department, when this was put forward? Was it zones of massive DIY retail stores? What is meant by that paragraph?
This goes against the grain of good planning in many respects, as I have said. It is zoning, and it is zoning in its worst form. It is not the zoning that was recommended by the Chancellor of the Exchequer when he referred to it. The model he had in mind, I think, was as in parts of Europe, where zonal plans are extremely detailed, they are contested, they are democratic and they are effective. But these plans will not be like that because PIP does not provide for that. These plans do not allow for the high-level speculative, off-plan development that is currently seen in England; for example, through appeals. I believe that permission in principle will work properly only if we consider the full range of planning considerations before the key in-principle decision is made. That seems merely logical, and we have argued that consistently on this side of the House. To introduce confusion such as this at this stage of the debate is very serious. I hope the Minister will be able to clarify her intention.

Lord Lansley: My Lords, I did not intend to contribute to this debate but, having seen the amendments and heard how the noble Lord, Lord Beecham, introduced them, I will say a word or two. I draw noble Lords’ attention to my interests in the register, as I have done on previous occasions when speaking to the Bill: I am chair of the Cambridgeshire Development Forum.
We shall go on to discuss permission in principle, of which I am very much in favour. However, Amendment 102D would insert the word “brownfield”, and so restrict permission in principle to brownfield land. That is not what the Government intended and, as the Government have made quite clear in their amendment  that says what the qualifying documents are, it clearly extends beyond brownfield land. Nor did I think from previous debates in Committee that it was the intention of the party opposite simply to restrict it to brownfield land. However, as the Members opposite are proposing to amend Clause 136, perhaps they do not support permission in principle at all.
Amendment 102E, which would change the wording to “land for housing”, seems to contradict the idea of housing-led development. If you can grant permission in principle only for housing-led development for “land for housing”, you have created a contradiction in the first subsection of the clause, such that it is only for housing, even though it may be “housing-led”. Amendment 102E seems defective.
I am against Amendment 102C, not because the Government do not want it to be housing-led development, but because if in the primary legislation we put “housing-led development”, we would have to define it there. The noble Lord, Lord Beecham, made it clear that it could be defined in all sorts of ways: the definition could apply to a very small number of houses in a large mixed-use development or to a large number of houses with very modest additional development. How it is defined matters. If one puts into primary legislation at the top of the clause, “housing-led”, but does not define it anywhere, it will be defined only in the Government’s subsequent guidance. However, because it is in the primary legislation, the interpretation in that guidance would be subject to judicial review as to whether it satisfies the argument that it is housing-led. That is a recipe for delay: each application would be subject to judicial review as to whether it satisfies the primary legislation.
The point is that the Government, quite rightly, since it will be a matter of detail, make clear in new Section 59A(8) to be inserted into the Town and Country Planning Act that guidance will be issued. Clearly, given the nature of the fine distinctions that need to be made about what housing-led development looks like, it will be for the Government in that guidance to set that out. These amendments should therefore be resisted.

Baroness Young of Old Scone: My Lords, the noble Lord has just pointed out some very germane issues that go to the heart of the concerns that led to this amendment. It seems to me that there is a lack of clarity about why we are trying to introduce a permission in principle proposition. Therefore, I very much support the concerns that my noble friend has raised in moving this amendment.
It would be slightly amusing, if it were not so serious, to watch the stately dance we have all gone through in getting to the point that we have. I have become an aficionado of the Delegated Powers Committee’s reports, which I would never have said before. In fact, I am waiting with bated breath for the next one. I do not know whether noble Lords have noted that a touch of irony has inserted itself into the titling of the committee’s reports: the first was simply called Housing and Planning Bill: Government Amendments, and the next was called Housing and Planning Bill: Further Government Amendments. I am  assuming that the next one will be called “Housing and Planning Bill: Even Further Amendments”. This stuff is getting more gripping than “The Archers” as the days go by, and that is entirely as a result of this being a half-formed principle with very little meat on its bones. We are all rather grappling with confusion about what the whole thing is aimed at.
I have real concerns that we are putting in the Bill an ability to grant permission in principle for any type of development in future if its sites are named in a qualifying document such as a local plan, a neighbourhood plan or a register. We already know that the Government have in mind not just a brownfield register but a small-sites register. Indeed, in her response to the Delegated Powers Committee, the Minister talked about wanting—“for example”, she said—the ability to extend the permission in principle proposal to retail or commercial sites. I kind of understand the argument that there is a need to pull something out of the hat to try to get housing sites through more quickly. However, so far, nobody has told me what the arguments are in respect of retail or commercial sites. Therefore, it seems rather rash if we pass legislation without being clear about the fundamental reasoning for changing something that is fundamental to the way that the planning process works. Indeed, were we to allow a proposal that permission in principle could be for any type of development if it were on a site in a qualifying document, we would be radically reforming the planning system.
The Minister says that that is in the interests of the plan-led system. However, staying with the Delegated Powers Committee, which is unconvinced by the Government’s arguments, I am unconvinced that it needs to be such a wide power. Indeed, it is such a wide power that the three statutory instruments that will follow to give additional flesh to the proposal are, in the case of the permission in principle provision, going to be by negative procedure. Therefore we will have no opportunity in this House to do very much other than confirm or reject. These powers are too wide and sweeping for a proposition that we ought to test on something for which there is an acknowledged need—for example, housing-led development. If my noble friend’s amendments are not quite right in their wording, I urge the Minister to recognise that there is genuine concern in this House about this proposal and to come back at Third Reading with amendments that would satisfy both the Delegated Powers and Regulatory Reform Committee and Peers around this House.

Baroness Williams of Trafford: My Lords, I am pleased to have the opportunity to open further discussion on the permission in principle measure today. I appreciate the time and effort that noble Lords have invested, in particular the noble Lords, Lord Beecham and Lord Kennedy, and the noble Baroness, Lady Andrews, in considering its detailed implications. I am grateful that they have shared their experience and expertise, which have proved extremely helpful in ensuring that permission in principle operates as effectively as possible.
In a moment, I will explain our government amendments to Clause 136 and why I believe they demonstrate that the Government have listened to the views expressed in Committee and have taken action  accordingly to improve the functioning of this measure. However, given that we have some further amendments on it, I shall briefly remind noble Lords what the Government are seeking to achieve and why we believe it is a worthwhile measure that should remain part of the Bill.
We know that there is concern in the industry about the lack of up-front certainty in the current planning system. In Committee, I highlighted issues around the cost of submitting outline and full applications without confirmation of the acceptability of the principles between plan-making and planning application stage. All these have been raised with my department by the Planning Officers Society, the Home Builders Federation and the Federation of Master Builders, and I highlighted that even last summer’s Lyons review recommended an approach where the principle of development is established earlier. Permission in principle seeks to respond to these concerns by making the planning process more certain and more efficient. It will help provide a way for small builders to enter the market and for locally supported plan development to get under way faster.
I explained at length in Committee that local authorities and neighbourhood forums would be in the driving seat when it came to choosing to grant permission in principle. I gave strong confirmation that the approach taken to granting permission in principle would be in line with local policy and the National Planning Policy Framework.
I hope that these brief comments have given noble Lords an update on the value of the measure. Alongside some of the amendments that we are laying to provide greater certainty on the use of permission in principle, I hope that this is enough to persuade the noble Lord, Lord Kennedy, and the noble Baroness, Lady Andrews, to reconsider their opposition to the clause.

Lord Beecham: The noble Baroness seems to be speaking to amendments in the next group.

Baroness Williams of Trafford: My Lords, I am just giving a brief overview and shall now move on to the amendments. They were introductory remarks—scene-setting, if you like—and I shall now speak to Amendments 102C, 102D and 102E. I may have been a little premature in some of my remarks, but they were intended to be helpful; I am sorry if it is felt that I have been a little ahead of myself.
I am keen to touch on the merits of permission in principle and to set out the amendments that the Government are making today. However, I shall turn first to the amendments tabled and comments made by the noble Lords, Lord Beecham and Lord Kennedy, that would restrict the granting of permission in principle.
Although I understand why the noble Lords have returned with the amendments, I must set out why we cannot accept them. First, and most importantly, Amendment 102D would limit the granting of permission in principle to brownfield land, as my noble friend Lord Lansley said. During the passage of this Bill, the Government have been consistently clear that permission in principle is a measure that aims to strengthen the local plan-led system and ensure that development takes place on sites that people want to see built. The  amendment therefore represents an unnecessary restriction on the Government’s desire to bring forward development where it is considered to be appropriate locally.
In Committee, I gave strong assurances that the choice about where to grant permission in principle would be a local one, guided by local policy and the NPPF. To put it very clearly, restricting the granting of permission in principle to brownfield sites would remove the ability for local authorities to grant permission in principle to other sites that they considered perfectly suitable for housing-led development, in line with local and national policy. The amendment would remove local discretion and severely limit the usefulness of the measure.
Secondly, Amendments 102C and 102E would limit the type of development suitable for a grant of permission in principle to “housing led” development. We have been consistently clear that we intend permission in principle to be limited to housing-led development and will specify this in secondary legislation. The noble Lord, Lord Beecham, referring to the DPRRC report, brought up a pertinent point and asked whether PIP could be granted for other uses. I have never sought to mislead the House, and I do not think that the noble Lord was suggesting that I was, but that we have been consistently clear that PIP is for housing-led development and that will continue to be the case under this Government. Clearly, we cannot hold future Governments to account, but we have made it clear that this is the Government’s intention. One of the DPRRC’s concerns was “What about future Governments?”, but this Government are absolutely clear that this will continue to be their intention.

Lord Shipley: Given what the Minister has just said about the measure being for housing-led development, does that mean that the Government are accepting Amendment 102C, which would simply insert the words “housing led”?

Baroness Williams of Trafford: My Lords, I am afraid it does not, because the amendments limit the type of development suitable for granting of permission in principle to housing-led. We intend it to be housing-led and will specify that in secondary legislation.

Lord Shipley: Can I be clear that the secondary legislation will be via the affirmative procedure rather than the negative procedure?

Baroness Williams of Trafford: I can absolutely confirm that to the noble Lord.

Baroness Young of Old Scone: The supplementary information that we received from the Minister’s department indicated that it would be a negative-procedure statutory instrument, unless I am misreading what she sent to me.

Baroness Hollis of Heigham: Can the Minister not help the House by coming back with an amendment at Third Reading which simply puts this in the Bill? It is very simple.

Baroness Williams of Trafford: My Lords, I apologise to the House because I have just made a statement that was not true. The Government do intend for it to be by negative procedure.
Putting something in the Bill does not allow the same flexibility as something being in secondary legislation. Moreover, we are currently consulting on the definition of “housing led”. It is important for us to set out the definition of what constitutes “housing-led development” in secondary legislation.

Baroness Andrews: The Delegated Powers and Regulatory Reform Committee advised the Government not to make policy while consultation was ongoing, which the Minister is now doing. The definition of “housing led” is clearly so liable to raise confusion that it should surely be on the face of the Bill

Baroness Williams of Trafford: My Lords, that is why we are reluctant to place something in the Bill while consultation is ongoing. I do not know whether we agree on that point for different reasons, but I shall let noble Lords further intervene.

Lord Beecham: I am sorry to return to the remarks that the Minister made in paragraph 36 of the response to the committee, but they are crucial. Will she clarify her stance now? She said then:
“I consider it to be reasonable for … other uses, such as retail or commercial space, where there is no housing element. There is no restriction on the types of development for which full or outline planning permission may be granted”.
That is not consistent with what she is now saying is the policy—that development should be housing led. The response to the Delegated Powers Committee makes it clear—or made it clear at that point—that it was not confined to housing-led development. That is why my Amendment 102C seeks to include that concept in the Bill. I am perfectly happy to abandon the latter two of my amendments because the first deals with the point which, as far as I can understand it today, seems to be the Government’s policy. But it was apparently not the policy when the reply was made to the Delegated Powers Committee.

Baroness Williams of Trafford: My Lords, I have paragraph 36 before me, and it refers to future uses. But I have always been clear that the intention under this Government was for this to be housing led.

Lord Beecham: I accept the Minister’s word for that, but that is all the more reason to build it into the Bill. All she has to say is, “We accept that”, and that is it. It confirms what is apparently the Government’s policy today, yet it was not the policy reported to the Delegated Powers Committee.

Baroness Williams of Trafford: My Lords, I can confirm today that it is the Government’s intention to have housing-led development. As I said to the noble Baroness, Lady Andrews, because the question of what “housing-led” might be is under consultation, I urge caution in placing such a definition in the Bill at this stage. We can put a suitable definition into secondary legislation.
I am well aware that there has been some misinformation about granting development involving fracking and other types of development for permission in principle. I hope that the government amendment tabled today that will prohibit granting permission in principle for development related to the,
“winning and working of materials”,
reassures noble Lords in that regard. With that, I urge the noble Lord to withdraw his amendment.

Lord Shipley: Will the Minister just clarify something? The forthcoming group of Government amendments do not mention the word “housing” at all. Have I read them correctly? We have been asked to wait to consider the next set of government amendments, but I do not think that they are relevant to this situation.

Baroness Williams of Trafford: My Lords, I hope that noble Lords will feel that they are relevant. With that, as I say, I ask the noble Lord to withdraw his amendment.

Lord Beecham: My Lords, I am not prepared to withdraw the amendment. I am sorry that the Minister is in such a tangle. I suspect that it is because she has not been properly advised either before today or indeed today. We seem to be clear that housing-led development is to be the principal purpose of this amended planning regime of permission in principle. I accept for the moment, although it is regrettable, that we do not have details of what housing-led development might amount to, but at the very least it must mean that housing will be part of the development. However, that was not confirmed in the response to the Delegated Powers Committee.
As in so many cases during the course of this Bill, it would have been much better if we had had a clearer indication of how the thing is expected to work in practice, but the principle at least should be enshrined in the Bill. Although that is not the full story, it would leave the Government to come back through secondary legislation—preferably affirmative—to specify what is meant by housing led. What it cannot mean is a development with no housing on it, by definition. Beyond that, there is scope for discussion and argument. I understand that the Minister is not in a position to give clear indications of proportions and the like at this stage, but the principle ought to be on the face of the Bill. Accordingly, I wish to test the opinion of the House.

Amendment 103
Moved by Baroness Williams of Trafford
103: Clause 136, page 67, line 7, at end insert—“( ) But permission in principle may not be granted for development consisting of the winning and working of minerals.”

Baroness Williams of Trafford: My Lords, it is my pleasure to turn to the government amendments we are making to the permission in principle measure. Again, I must emphasise that these demonstrate that the Government have listened closely to the concerns expressed and have taken clear action to improve the functioning of the measure.
In Committee I set out the Government’s clear view that development involving fracking would not be suitable for permission in principle. To press home this assurance even further, Amendment 103 will set out in the Bill the type of,
“development consisting of the winning and working of minerals”,
which cannot be granted permission in principle. This definition encompasses development that may involve fracking, so I hope noble Lords will agree that this amendment is positive and a helpful clarification which should form part of the Bill.
I turn now to government Amendments 104 to 106. The Government have been consistently clear that only documents that have been through robust processes such as consultation and site assessment will be capable  of granting permission in principle and that these would therefore be limited to local plans, neighbourhood plans and new brownfield registers. During the debate on this measure in Committee, the noble Lord, Lord Shipley, tabled an amendment that sought to specify these documents in the legislation, which he felt would be an improvement to the Bill. In the light of his comments, I agreed that I would reflect further on the need for an appropriate amendment that lists and limits the qualifying documents capable of granting permission in principle. I hope that the noble Lord will be pleased to see that the amendments achieve this by setting out the specific documents capable of granting permission in principle. These are:
“a register maintained … under section 14A of the Planning and Compulsory Purchase Act 2004”,
introduced by Clause 137 of this Bill;
“a development plan document within the meaning of Part 2 of the 2004 Act … a neighbourhood development plan”.
I hope the amendment demonstrates that the Government have listened to the call for greater clarity on how PIP will be used and that it will be welcomed by noble Lords.
I turn to government Amendment 106A which contains two further changes to the permission in principle measure. First, the amendment will enable local authorities to vary the start date and end date of permission in principle granted on allocation. It will give greater local flexibility and allow the timings for permission in principle to better align with planning delivery of sites. The amendment will also allow local authorities to vary the end date of permission in principle granted on application. It aims to mirror Section 91 of the Town and Country Planning Act 1990 which currently allows local authorities to vary the timing of planning permission. We will set out the prescribed period for the duration of permission in principle in secondary legislation, which will apply if local authorities choose not to set the length of permission in principle themselves.
Secondly, the amendment will extend our statutory guidance power to enable the Secretary of State to issue guidance on how local authorities should handle the technical details of the consent process. It is important that we make it as clear as possible for local authorities, developers, statutory bodies and the general public how the new permission in principle system and the resulting technical details consent stage should work. The guidance will also help to make permission in principle fully accessible to all users, thereby placing strong expectations on how, where and in what circumstances permission in principle and technical details consent can be granted.
I hope noble Lords agree that issuing guidance will inevitably prove helpful by maximising the clarity and overall success of these measures, and that the amendments will therefore become part of the Bill. I hope also that these amendments resolve some of the concerns expressed during consideration in Committee. In the light of my introductory comments, I hope noble Lords will see the value of these measures and support them. I beg to move.

Lord Shipley: My Lords, the Minister has kindly explained the changes which are to be made following the amendment that I moved in Committee. At that point I had the advice of the Royal Town Planning Institute, and I remain grateful for that. I am also grateful to the Minister for the changes that have been made, which seem to be entirely appropriate. I just want to express my thanks to the Minister for her willingness to clarify the matter.
No doubt there will be other contributions on the other amendments, but the vote we just had is very important because it defines clearly that permission in principle relates to housing-led development. When I look at the amendments I have difficulty finding where the reference to “housing-led” is; I cannot find one. Therefore, the doubt we expressed in debating the previous group remains. I hope, with that position having been made clearer by that vote, that we might enter some discussions about this. Clearly, it will go to the other place, but I hope that the Government might see that there really is a need to ensure that permission in principle is housing-led and that that is in the Bill.

Baroness Andrews: My Lords, I have added my name to Amendment 107ZZB in this group, which is a sort of clause stand part amendment. The Minister has tried, very graciously and well, to address some of the problems we have with permission in principle in practice. I appreciate that and I appreciate the time she spent talking to us and exchanging information. Unfortunately, I do not think that anything addresses the fundamental flaw of permission in principle. I do not want to labour the point I made both at Second Reading and in Committee, but I will put a few things on the record at this stage as to why, both in principle and in practice, it will not do what she says she wants it to do and what we all would want the planning system to do, which is introduce greater certainty in the whole process for developers, local authorities and housebuilders.
I think all noble Lords around the Chamber agree that it is a basic principle of rational planning that principle and detail are directly related because they inform and guide each other, and they determine the final planning judgment. That is the system we have now, when the right knowledge comes forward at the right point in the decision, so that everybody knows what is predictable and certain about the site and development proposed. That allows local people to understand and respond to the impact that the development will have on their living space. The system is not perfect, but neither is it the cause of the delays in housebuilding that have caused the present crisis. Those delays are much more to do with finance and access to land than they are with systemic problems with the planning system.
I agree that the NPPF has made a real difference to the way planning is done and it achieves an excellent balance between protecting development and enabling it. My concern is that permission in principle drives a wedge through the whole process by dividing the three fundamental principles of permission in principle and the rest, which is rather ludicrously described as “technical details” when we are talking about fundamental things that make a site, a development, a community, work.  It is everything—from infrastructure to the use of materials, to spatial relationships, to public space—that makes a place worth living in. If things are wrong, undiscovered or unanticipated at that stage, or simply do not work, permission in principle cannot be overturned. It seems illogical and deeply flawed because permission in principle puts all the balances at risk. It raises risks, rather than reduces them. That is not likely to speed up housebuilding. I am not being perverse; I am genuinely concerned that it will not have the positive effect that we all want.
If in the present system there is an overload of information at the early stages of decision-making, as the Government have said at so many stages, I feel fairly certain that this could have been addressed in different ways. Other ways could have been found to manage information, rather than relegating it to a subordinate stage of decision-making. As I have said, when we do have that information we will be unable to overturn the permission in principle. That is the fundamental problem referred to by all the professional planning bodies. It is turning up now in the 850 responses that the Minister has received to the consultation. There is genuine consistency across the planning profession.
I am arguing for a chance to think again, because PIP creates unnecessary risks. It creates the risk that high-level plans cannot be overturned, even if subsequent details clearly indicate the unsuitability of a site or the poor performance of the proposal. It is imperative that a proposal is permissible only if it is in line with the NPPF. I am pleased that the Minister has given me several assurances on that. I hope that they will prove robust, because the alternative will be JRs and court investigations. We do not want to see that.
As I have said, if the bottlenecks in the current finance and land-banking arrangements were to be addressed, as the Select Committee on the future of the built environment suggested, and if local authorities were encouraged to plan properly for age-related demography and needs and could build up their capacity to deal with the planning choices more fluently and expertly—we will come on to that in a later amendment—we would be able to deal more successfully with the housing crisis we face. My fear is that PIP will not achieve its objectives and could do some considerable harm.

Earl of Listowel: My Lords, I had not planned to comment on these issues, because my experience is limited. I remind noble Lords of my registered interests as a landowner. I recall speaking some years ago with a young project manager on a development about extensive work she had done in consulting local people in taking forward this development. It seemed to her that she had done everything that the local planners had asked of her but she found that her work was not acceptable. She said that this was often her experience—one jumps through all the hoops and suddenly one finds that the hoops have changed. This is only one person that I remember speaking to about this issue, but it certainly left me concerned that there is not enough certainty in the system and that developers  can put a lot of work into a project and find that suddenly the hoops have changed and different requirements are being asked of them. I just wanted to put that into this debate.

Lord Kennedy of Southwark: My Lords, Amendment 107ZZB in this group, in my name and that of my noble friend Lady Andrews, would delete Clause 136 from the Bill. The clause is concerned with permission in principle and was debated at some length in Committee in your Lordships’ House. Permission in principle is a major change in how we approve developments. It has, of course, been suggested that the supply of new homes is being held back due to the planning process and the failure to get planning applications approved. That is complete nonsense which has been cited by one or two noble Lords in debate on this issue in recent times.
I tabled a Question to the Government on this issue and received a reply from the noble Baroness, Lady Williams of Trafford, on 4 April. In her reply the noble Baroness confirmed that there were planning permissions for 658,000 homes in England where work was either not started or not completed. That is a large number of approvals. As a local councillor I have approved some of those applications over the last two years. In the area where I live I regularly note sites for which I have been party to approving an application for housing but nothing has happened. All that has happened on one site is that, a few days after the committee gave permission for housing, a “for sale” board went up saying, “for sale with full permission for housing and two shops”. That is all that has happened since we gave permission well over a year ago.
That is not the local planning authority dragging its feet or attempting to stifle development; no, there are other factors at play here which this clause does nothing about. It is about the value of land and the price it is rising at. It can also be about the ability to raise finance to undertake a development. It is not about a planning authority dragging its feet. We very much support building new homes, although we may seek to do it in a different way. We want to see brownfield sites brought back into use for housing and other ancillary and alternatives uses, but we have concerns about what will be built, in terms of design, space, energy efficiency and affordability. We want to see a range of tenures and the building of viable, long-term communities.
Government amendment 106A confers additional powers on the Secretary of State. I draw the attention of the House to the 28th report of the Delegated Powers and Regulatory Reform Committee, in particular the section concerning Amendment 106A which starts at the bottom of page 1 and carries on to page 2. The report concludes:
“Inadequate and incomplete provisions of proposed primary legislation cannot be excused on the basis that consultation has not taken place or that the Government wish to retain ‘flexibility to set out differing timeframes as they apply in different contexts’. The policy should have been finalised following appropriate consultation before, not after, the Bill was introduced.
We therefore consider that the delegation of power in the proposed new Section 59A(8) inserted by amendment 106A is inappropriate, and that the duration of permission in principle should instead be specified on the face of the Bill. An alternative  approach, although we think that this is a less satisfactory option, would be to specify the maximum duration on the face of the Bill, coupled with an affirmative procedure power to provide for a shorter period”.
That is damning criticism by the committee and the Government should take heed of it.
To help matters along I make the following offer to the Government. If the noble Baroness, Lady Williams of Trafford, will withdraw the amendment today with a view to reflecting on the concerns raised by the Delegated Powers and Regulatory Reform Committee and bringing an amendment back at Third Reading that takes those concerns on board, then in the same spirit we will not test the opinion of the House on our Amendment 107 in the next group, in my name and that of my noble friend Lord Beecham. Instead, we will wait to see if we can get an amendment that addresses the concerns raised in the report. It is for the Minister to decide what to do and I hope the noble Baroness will take up this offer made in the spirit of wanting to get this right.

Baroness Williams of Trafford: My Lords, I thank all noble Lords who have contributed to this short debate. Let me clarify that the Government do want to get this right. We do not want PIP to be a disincentive to building homes or create risk in the system. I take on board what the noble Lord, Lord Kennedy, says about the comments of the DPRRC. I am very willing not to move Amendment 106A for the time being, and to use the next few days and perhaps bring something back at Third Reading.
Amendment 103 agreed.

Amendments 104 to 106
Moved by Baroness Williams of Trafford
104: Clause 136, page 67, line 28, leave out “plan, register or other”
105: Clause 136, page 67, leave out lines 30 to 32 and insert—“( ) falls within subsection (2A),”
106: Clause 136, page 67, line 37, at end insert—“(2A) The following documents fall within this subsection—(a) a register maintained in pursuance of regulations under section 14A of the Planning and Compulsory Purchase Act 2004 (“the 2004 Act”);(b) a development plan document within the meaning of Part 2 of the 2004 Act (see section 37 of that Act);(c) a neighbourhood development plan within the meaning given by section 38A of the 2004 Act.”
Amendments 104 to 106 agreed.
Amendments 106A and 107 not moved.

Amendment 107ZZA
Moved by Baroness Andrews
107ZZA: Clause 136, page 69, line 2, at end insert —“(2ZZD) An application for technical details consent in relation to permission in principle will be subject  to section 61W (consultation before applying for planning permission) and section 65 (notice etc of applications for planning permission) of this Act.”

Baroness Andrews: My Lords, I have two amendments in this group which deal with slightly different issues. The first is an amendment on the consultation on technical details. I have retabled this amendment, which I laid in Committee, because I felt that the explanation the Minister offered was rather elliptical and because there is now emerging evidence that expert and civic groups which have already responded to the consultation are seriously concerned about this. I want to give the Minister an opportunity to put her thoughts on the record.
The amendment would, in effect, make it compulsory for local authorities to hold a consultation at the second and technical stage of PIP before planning permission is awarded. My argument was then, and it remains, that it is often only at this stage, when the details of the site development are released, that local people really play their part in determining what is best for them and what would really work. That can be anything from the nature of local materials to the location of health centres or shops.
The Minister has written very helpfully to me and I am very grateful. I would like her to expand, on the record, on what she said:
“The idea is that local authorities will have consulted both statutory agencies and the community at the permission in principle stage”.
I find the phrase “The idea is…” rather worrying. Surely we should have something more at this stage than what sounds like wishful thinking. It is important to understand that argument, because her assertion underpins the reasons spelled out in her letter as to why there will be no required consultation at the technical details stage. She goes on to say:
“When a subsequent application for technical details consent is received we consider that the local authority will therefore be in a good position to determine what further engagement is appropriate at this stage. This could make for a more efficient approach and avoid unnecessary duplication”.
The fact is that the consultation papers I have seen suggest that this has gone down very badly with those who count. The Minister quotes Civic Voice, for example, which carries the experience of civic societies throughout the country. What Civic Voice says in its response is:
“While we agree that PIP for allocated sites should be consulted upon through the local and neighbourhood plan processes, we strongly disagree with the proposal that local authorities will not be required to consult with the community and others on applications for technical details consent. It is likely that there will be important matters still to be considered at this stage that affect communities and they should, therefore, be entitled to submit representations. The reality is that it is not just the principle of development that can cause concern to communities and others but the layout, design and relationship with development. This will be the first opportunity for communities to see what the proposed development will look like”.
That is extremely relevant and very true. That is also the reaction, significantly, of the London Forum of Amenity and Civic Societies, the TCPA and Historic England. I read only four consultation responses instead of 850, but I have a reasonable idea that that view would be echoed by many more. Civic Voice advocates quite simply that an application for technical details consent should be subject to the normal consultation procedures for a standard planning permission. The fact  is that the local voice in local decision-making is getting rather faint. That worries me, and, I think, many noble Lords. I ask the Minister for reassurances that the expert group on local plans will not reduce even further the right of local people to participate in local decisions.
The Minister told me in her letter that she would consider my concerns about this approach, together with the responses to the consultation before finalising the necessary regulations and guidance. That is extremely important and very helpful news. However, I press her to go a little further. On a related point, I doubt that any of her consultees agree that cutting down the time for consultation from eight to five weeks—which is also proposed—is sensible. Frankly, this gives the average parish council hardly time to meet before it has to produce its consultation response, bearing in mind that most of them meet once a month. Therefore, I seek assurances from the Minister on that. For a start, will she place in the Library a breakdown of the responses to the consultation on the specific point about consultation itself, because that is really important? She will know that the role and the plausibility of consultation is something to which the scrutiny committees of this House return time and again for criticism. It is important to validate that this is a credible consultation process and that people have been listened to. Therefore, can I have an assurance on the record that if the weight of responses from those expert and community organisations reject the idea that local authorities should not be obliged to hold a consultation at the technical details stage, this proposal will indeed be dropped and normal planning rules will apply? I will not press this to a vote this evening but I would be very grateful for some assurances along those lines.
I am very sad that the noble Lord, Lord Greaves, is not in his place because I feel quite isolated. I am sure that he would have a great deal to say on the involvement of local people. We miss him very much indeed. He is not here, sadly, but I know that this case resonates around the House. There are many instances in which the local voice and localism are at risk of being diminished in the context of planning. In the longer term, I am sure that it is much wiser to listen to local people.
I turn now to my Amendments 107ZA to 107ZD. In Committee, I tabled two amendments which were intended to identify—in short—some of the hazards that would flow from the creation of PIP and the splitting of the process into two, and to reflect on some of the damage that might be done and some of the unintended consequences. I spoke about archaeology because that is a very acute example. Archaeology is not an exception, as the Government seem to argue, but is the predictable and likely collateral damage in a situation where decisions are taken without full knowledge of what is under a site. New and unanticipated archaeological discoveries are made every day—witness the magnificent Roman villa discovered in Wiltshire last week, which people had no idea about and which may turn out to have international significance in terms of the extent of the Roman Empire and the villa’s great wealth and so on. It is very important.
In the existing planning system, the norm has been for many years to carry out pre-determined archaeological investigations. It is a familiar process and it works well. That is swept aside by permission in principle and is not even required at the second technical details stage. In the consultation, the Council for British Archaeology simply said the following to the Government, which I want to put on the record:
“If Government wishes to avoid re-visiting ‘in principle decisions … at multiple points in the process’ … it must fully recognise and address the corollary, namely that in order to avoid re-assessment at a later stage all necessary information which may affect the principle of development or its viability must be assessed before permission in principle is granted (and, with regard to archaeological issues, this should be specifically recognised in legislation and stated in policy)”.
One of the things I suggest the Minister might consider doing is meeting the Council for British Archaeology and the Chartered Institute for Archaeologists face to face to discuss their concerns. She might also explicitly endorse the policy set out in paragraph 128 of the National Planning Policy Framework and ensure that, where it is felt to be necessary, an archaeological site investigation could be made as part of the conditions attached to technical consent. It would be helpful to have that endorsement. Perhaps she could give me an answer this evening or write to me before Third Reading.
This group of technical amendments is much narrower. It is concerned with a very important point, which is the need to close a loophole in the present Bill and to strengthen the PIP process and the protection available to the historic environment. The Minister was gracious enough to say in Committee that I had a good point, because neither revocation nor modification was provided for in relation to a PIP granted by a local plan or brownfield application. These amendments fill that gap and I am very grateful to her and to her department for their extensive help with this. She did say, however, that there was provision for those PIPs granted directly to developers who seek a PIP outside a local plan to be revoked or modified in rare circumstances. This was news to us in the Chamber in Committee but it was helpful. However, perhaps the Minister could put on the record what she thinks might constitute “rare circumstances”. In these amendments I am concerned essentially with what was left out of the Bill, perhaps by accident—that is, the majority of PIPs which will be driven by local plans themselves. These amendments would bring these PIPs in line with present planning law, which would not only bring welcome consistency, frankly, but would also, I hope, alert developers and local authorities to the risks inherent in a system where the fundamental decision may well be taken without full knowledge of the actual and detailed conditions on and under the site.
This amendment—technically by way of Schedule 12 to the Bill—seeks to extend the existing powers set out in Section 97 of the Town and Country Planning Act 1990 to enable a local authority to revoke or make modifications to a permission in principle granted on allocation in a local plan or register. Provision is also made for appropriate compensation. I think we are talking here about exceptional circumstances—perhaps  the Minister will confirm that. I ask her to do that because I know that there is a problem with these amendments—namely, that in practice this provision, which exists in planning law, is not often used primarily because the cost of compensation is so high and the risks can be huge. That is all the more reason for pushing this amendment because the risks in this process—as I have said so many times; I am boring myself on this—are far greater and the information available will be more limited and could arrive too late. These amendments also provide for compensation, which in these circumstances could be very extensive. That is another reason why I think local authorities and developers need to be fully alert to this hazard. Perhaps the Minister can give me an assurance that the compensation regime will indeed be affordable for local authorities. So what may seem just a technical provision will flag up in capital letters the absolute necessity for local authorities and developers to understand the system and to know that they must apply the conditions and requirements of the NPPF.
I am very grateful to the noble Baroness. I am sorry that it has taken me 12 minutes to get through this but it is important to have all this on the record because it will make a substantial difference to how the system works. I beg to move.

Lord Lansley: My Lords, I contribute briefly in respect of Amendment 107ZZA simply to say that I did not agree with the noble Baroness, Lady Andrews, on her criticism of permission in principle. I think it will enable certainty to be given and the process to be speeded up. Certainty about how the system works is needed not only for the developer but for the community. I am sure many noble Lords will be familiar—as I have been—with the process, whereby communities often find it intensely difficult to understand that, at the same moment that they have to debate the principle of development, and maximise their subsequent effectiveness, they also have to think about what the subsequent conditions might be and the mitigation of effects. In their minds, they often want the two things to be separate. They feel, understandably, that—through the extent to which they offer recommendations to local planning authorities about modifications to an application, compromises that can be reached, mitigation that can be entered into and conditions to be imposed—they are opening the door to the principle.
I think that here we could have something that, to local communities, is much more rational. In the local plan process, they should devote themselves to the question of whether development in principle should happen in a particular site, knowing that subsequently, through the technical details consent, in so far as there is necessary mitigation—for example, something like the environmental assessment should establish whether development in principle is right on a site—a detailed impact assessment should be able to identify what is required by way of mitigation. For a local community, these are two completely rational, separate processes. They have to be sure—this comes to the point of the noble Baroness’s amendment—that they will get adequate notification and an opportunity to express their view about what that mitigation should look like in the technical details consent. I know my noble friend is  very much aware of this and I hope she will be able to give the reassurance that the noble Baroness is looking for.

Baroness Williams of Trafford: My Lords, I voice my thanks, again, for the time taken by noble Lords, including the noble Baroness, Lady Andrews, in trying to get right this aspect of the legislation and ensuring that permission in principle is as effective as possible. In Committee, I outlined the rigorous process of consideration and engagement that would be followed before granting permission in principle. In that context, I highlighted that I thought a situation where no scheme could be delivered in line with the permission in principle agreed on site, owing to unforeseen circumstances discovered at the technical details consent stage, would be highly unlikely. The noble Baroness presses me to give examples and I cannot get this example from my mind: it is another king in a car park, but where the whole car park is made unsuitable for development and not just a part of it, which can be allowed for in certain circumstances.
I informed noble Lords in Committee that the Bill already makes provision for permission in principle granted on application to be revoked or modified by a local authority if it considers it expedient to do so in extremely rare circumstances. I also recognised that, in the case of PIP granted through a locally prepared plan or register, the Bill does not currently provide for revocation or modification in such instances and that I would reflect on the need to make such a provision. I therefore wholly welcome the amendments that the noble Baroness, Lady Andrews, has tabled and strongly support their inclusion in the Bill. I also thank her for the way in which she has worked with me and officials in coming towards this stage. Amendments 107ZA, 107ZB, 107ZC and 107ZD will indeed enable local planning authorities to revoke or to modify the permission in principle granted by local plans or registers, where they consider it expedient to do so. Amendment 107ZD will also enable us to set out sensible compensation arrangements in these circumstances in secondary legislation. The amendments will extend the existing provisions that local authorities have to revoke or modify planning permissions to the permission in principle system. They will ensure overall consistency and provide an important final safeguard to address the rare and exceptional circumstances discussed in Committee, where this may be needed.
Amendment 107ZZA tabled by the noble Lord, Lord Beecham, and the noble Baroness, Lady Andrews, will oblige every applicant to engage with the community on their proposals before they submit an application for technical details consent. I certainly applaud the intention to involve the community in the development of a detailed planning application. Indeed, the NPPF and our planning guidance stress the importance of applicant-led, pre-application engagement. However, the power in Section 61W of the Town and Country Planning Act, inserted by the Localism Act 2011, is currently being used only to ensure compulsory pre-application consultation for onshore wind development above an appropriate threshold. This is a targeted requirement to help ameliorate local community concerns about and perceptions of such projects. I understand  that the noble Baroness has laid this amendment because she is keen to ensure effective consultation; I do not believe, however, that applying this requirement to all technical details consent applications is the right approach.
We have just finished consulting on an approach that would give local authorities the discretion to consult further at technical details stage, where they consider it appropriate. We consider this a more locally led and efficient approach to consultation that will minimise unnecessary duplication between the permission in principle and technical details consent stages. The noble Baroness asked me about the expert responses to the consultation. I understand that we have received 150 responses. The noble Baroness asked if we would place them in the Library; I am very willing to do that.

Baroness Andrews: May I just correct the noble Baroness? I thought there were 850 responses. That is not my main point—I wanted to ask whether she could lay an analysis of the consultation responses to the specific point about consultation on technical consents stage. My reading of a handful of responses—but important ones—showed that they are all very seriously worried that there will not be a requirement for local authorities to consult at that stage.

Baroness Williams of Trafford: I apologise to the noble Baroness; maybe my writing is playing up. I accept that that if there were 850 responses, there were 850 responses and my writing is possibly wrong. The Government will of course analyse the responses carefully and engage further, as appropriate.

Baroness Andrews: Is the noble Baroness saying, on that basis, that she can assure me that if the weight of opinion—by which I mean community and expert opinion—is that this is not a good idea, they will simply revert to the normal planning requirements for proper consultation?

Baroness Williams of Trafford: My Lords, I totally admire the noble Baroness for the way she is pressing me on this. At this stage, given that I have not seen the outcomes, I do not that I can make a commitment. But we will certainly analyse the results carefully and engage further, as appropriate. I hope, therefore, that the noble Baroness feels free to withdraw her amendment.

Baroness Andrews: I am happy to withdraw my amendment. I appreciate that it is not easy, not having seen the consultation, but my instinct tells me that we will gets the results that I am anticipating and I hope it will make an impression on the department—you do not want to ride roughshod over local opinion. The Government have committed to localism and to supporting local authorities. I am very grateful for the support and wisdom of the noble Lord, Lord Lansley, in this respect as well. I beg leave to withdraw my amendment.
Amendment 107ZZA withdrawn.
Amendment 107ZZB not moved.

  
Schedule 12: Permission in principle for development of land: minor and consequential amendments

Amendments 107ZA to 107ZD
Moved by Baroness Andrews
107ZA: Schedule 12, page 161, line 27, leave out sub-paragraph (3) and insert—“( ) In subsection (1), for the words from “modify” to “the authority” substitute “modify—(a) any permission (including permission in principle) to develop land granted on an application made under this Part, or(b) any permission in principle granted by a development order,the authority”.”
107ZB: Schedule 12, page 161, line 43, leave out “and in subsection (1)”
107ZC: Schedule 12, page 162, line 1, leave out “subsection (4), for” and insert “subsection (1)—(a) after “planning permission” insert “or permission in principle”;(b) for “section 97” substitute “section 97(1)(a)”.( ) In subsections (2) and (3), for “this section” substitute “subsection (1)”.( ) In subsection (4)—(a) for “this section” substitute “subsection (1)”;(b) for”
107ZD: Schedule 12, page 162, line 2, at end insert—“( ) After that subsection insert—“(4A) A development order may make provision for the payment of compensation, in such circumstances and subject to such conditions as may be prescribed in the order, where permission in principle is revoked or modified by an order under section 97(1)(b).””
Amendments 107ZA to 107ZD agreed.

Motion
Moved by Viscount Younger of Leckie
That further consideration on Report be now adjourned.

Viscount Younger of Leckie: In moving this Motion, may I suggest that the Report stage begin again not before 8.30 pm precisely?

Lord Lucas: My Lords, if I may add a rider to that, anyone who is interested in my Amendment 107A had better look at Amendment 107B, which is a manuscript amendment that has recently appeared, outside.
Motion agreed.
Consideration on Report adjourned until not before 8.30 pm.

Horserace Betting Right
 - Question for Short Debate

Viscount Astor: To ask Her Majesty’s Government what progress has been made towards the introduction of the Horserace Betting Right.

Viscount Astor: My Lords, since I put down this Question for Short Debate, events have moved on and the Government have proposed an extension of the levy rather than their original proposed racing right. Much has to be done to succeed finally in bringing a long-term funding solution for racing but it is worth reminding your Lordships that a year ago, the Government proposed the racing right. It was, if one can call it this in Civil Service terms, a bold move which almost immediately ran into opposition from the entire betting industry.
The scene had been set earlier when my noble friend Lord Gardiner of Kimble accepted my amendment to the Gambling (Licensing and Advertising) Act 2014—an amendment originally blocked in the Commons when it was moved there—to extend the right to claim levy payments from bookmakers who had moved their operations overseas. Racing was set to lose about £33 million a year in levy payments but the Government have not yet used this power. As I said, their proposal ran into almost total opposition mainly because the bookmakers feared that if the principle was accepted, other sports would want the same treatment. The Government had to think again and in March announced a new levy scheme.
One cannot blame the bookmakers for inventing the most tax-efficient and profitable system for themselves but to protect the punters and problem gamblers betting on UK racing, it has to be regulated in this country. While the levy is only a small share of the overall turnover of racing—less than 7%—it is a vital part of racing’s income. The levy was running at about £70 million a year, down from the highs of about £100 million, but was forecast to fall to under £50 million. It is fair to ask, as the bookmakers have asked, why this could not be made up by increasing media rights payments. The answer is actually quite simple: most online operators, in what is after all the fastest-growing sector of the market, do not provide television coverage for their customers.
Racing has often been divided in the past but it has come together and the majority of the major courses have agreed an authorised betting partner status, whereby bookmakers who do not contribute to the levy from their overseas operations are not allowed to sponsor races. Racing UK, the television subscription channel, followed suit and announced that it would not renew contracts for on-screen advertising and sponsorship for those firms which had not signed up to the betting partner scheme. Critics prophesied that Cheltenham would be without a major sponsor but that did not happen. New sponsors were found and the festival was a great success. The bookmaking industry complained only because too many favourites won. Of course, when this new plan is implemented this will not be necessary, as under it, all will contribute. Racing has always had the power to influence events. I suppose that an even simpler solution would be for owners and trainers not to enter their horses in races sponsored by bookmakers who do not contribute, but that is probably too much to expect.
There are, if one can use a racing analogy, a number of hurdles to jump and questions that need to be answered. I am sure that the Minister will provide some detail this evening. All British bookmakers betting  on British racing, based onshore or offshore, will be part of the scheme and it will no longer be worthwhile to export bookmaking jobs abroad. More importantly, a fair return will need to be put in place from all gambling operators who take bets on British racing. Will that include bets taken by remote operators on British racing but put on from somewhere totally different in the world? There will have to be a separate system, as there is now, for on-course operators. The big questions that bookmakers and those in racing want to know the answers to are: how will the payable rate be set, and how will it be enforced on overseas operators? Will it be subject to an annual negotiation or set for a number of years? How will a fair return be assessed? Will it be on turnover rather than a share of the bookmakers’ gross profits? How will the proposed VAT be set and what will it include? Will it, for example, include advertising?
The money under this new scheme will go to the Horserace Betting Levy Board and then passed to a new racing authority, which will be responsible for decisions on how the money will be spent. Can my noble friend the Minister say how this body will be set up? Will it be statutory or an entirely independent body? I understand that to bring in the new scheme, the changes required will need secondary legislation to the Gambling Act 2014. Perhaps my noble friend can give your Lordships some details of what will be required. What role, if any, will the bookmakers’ committee have in the future, particularly on multiplatform betting?
The next hurdle will be the European Commission. The new scheme, although based on an existing scheme, will require state aid approval as was done for the French levy. The levy has not been subject to an assessment so far under state aid, as it originated prior to this country joining the EU. Perhaps my noble friend the Minister can explain why it is necessary when what is proposed is really only a variation on the present levy scheme. Why is legislation and approval from the EU necessary? If approval is required and there are no issues, responses could be given in two months but I am sure there will be objections from some remote gambling operators. That would then extend the process, while the European Commission’s final decision is subject to review by the European courts. Some bookmakers have produced legal advice, which I know we will hear of this evening, saying that this cannot succeed. Others differ but, as those of us involved in debating the issues around racing know, if they are paid enough lawyers can produce almost any review that the bookmakers or anybody else wish to have. They will satisfy any criteria if they try hard enough.
One should congratulate the Government. This proposal will benefit racing, protect punters, stop the flow of jobs and tax revenue going abroad and, in the long term, be good for the whole industry. Racing is a major industry, providing work for more than 86,000 people, contributing £3.5 billion to the economy and generating £10 billion in betting income. So what is missing from the Government’s proposal? Perhaps they will consider this: racing needs to ensure that standard betting data are available for all. We also need to know what the dispute mechanism will be. As we have seen in the press, internet bookmakers are quite prone to cancelling winning bets.
The racing industry and the bookmaking industry are a partnership—not always a happy partnership, but a necessary one—and I am glad that the Association of British Bookmakers has welcomed the Government’s announcement. It is a major step forward for the industry and racing to work together going ahead. However, betting is not just about racing, as it allows bookmakers to cross-sell other products. Each cannot survive without the other, and these reforms can benefit both. I look forward to my noble friend the Minister’s response.

Baroness Mallalieu: My Lords, I congratulate the noble Viscount on securing this important and very urgent debate, and on attracting so many runners, although it means that we will all have to sprint from start to finish. I declare my interests as a former member of the British Horseracing Board and a current trustee of both Racing Welfare, which is the charity for those who work in racing, and their union, the National Association of Stable Staff. I am also president of the Horse Trust which, like the current levy board, makes considerable grants for equine scientific research.
First, I am grateful that the Government have embraced the proposal for a new racing funding mechanism. As I understand it—and I hope this will be confirmed—they are committed to having it in place in 12 months’ time, in April next year. We need to know how this is to be done, and the timetable for it, because the last time an attempt was made to replace the levy it ended in tears in the European Court. We want to avoid that happening again at all costs.
Then, the levy had to be hastily revived, and has continued up to now to do an excellent job against a background of a continuing drop in revenue and expansion of offshore operations, some of which avoid making a fair or any contribution to the industry from which they derive substantial profit. A new, fair, robust system to finance the horseracing industry is long overdue and is needed as soon as possible, before the industry is damaged.
Despite this falling levy revenue, horseracing in this country, to my mind and, I think, most others, remains the best in the world. The breadth, quality and integrity of racing here attract owners from all over the world and enable ordinary racegoers such as me to see most of the best horses in the world run on our doorstep. With, I hope, more prize money generated from the new proposal, I hope we may see even more of those horses. If we cannot produce the money, we shall lose them. For stable staff too—there are 6,500 of them working in yards—an increase in prize money would be welcome, because it means a direct benefit in the form of the percentage they receive from stable winnings.
The Government have said that racing will decide how the new money is to be spent. Some of the objects of the present levy scheme are not for the benefit just of racing but of the wider horse population and included, for example, support for rare breeds. I hope there will be an undertaking from the Government tonight, and from racing in due course, that spending will continue not to be narrow and partisan and confined solely to racing. Racing is inextricably linked  with the British horse population as a whole—not just in matters such as a shared need for disease control, but training those who will ride and care for horses later. A healthy equine industry, both people and animals, is an essential part of a strong, vibrant and successful racing industry.
Finally, I also hope that the new fund will be at least as generous in making grants for veterinary science and training as the levy has been—I know that the noble Lord, Lord Trees, will speak about that later—£32 million since 2000. I also hope that those who select the research projects will coordinate closely with the limited number of other equine research providers, so that the wider horse population—

Earl of Courtown: My Lords, I beg the noble Baroness’s pardon for interrupting, but can we have the next speaker now? There are three minutes each, and the noble Baroness is on her fourth minute.

Baroness Mallalieu: I apologise.

Lord Addington: My Lords, I have an interest to declare that is not as extensive as those of the previous speakers. I live in the village of Lambourn. To anyone who knows anything about racing, that means that you are constantly surrounded by horses. It is one of the few places where, if you are driving a car in the early morning, you will be stopped by a string of racehorses—indeed, more than one, if you time it properly. I fear that my only other connection with racing is a secondary one, because I am the only member of my family who does not ride a horse although, according to my daughter, many a racehorse is glad that I am not trying to get on it.
We are talking about money that goes into racing, and those communities in racing will benefit from the trickle-down. It may not be the most direct way to make sure that those communities remain vibrant, but an entire society and small economy is dependent on that income. We have an industry here—an entertainment industry, but an industry none the less—which sells to its market. People want to get in on it, but those who are buying it, or at least profiting from it, are not contributing to it. Something is wrong.
The Government seem to be taking the right steps. Will they ensure that the move to offshore gambling does not stop that income coming in? As the noble Baroness, Lady Mallalieu, said, the entire equine world in this country benefits from what happens in racing. Everything comes in from it: vets, support, stables and everything else benefit from it. We cannot remove those sections from each other. Indeed, equine activity at the Olympics benefits from expertise generated within racing.
I hope the Government can assure us that they will pursue this with all vim and vigour to make sure they get the money. It is not just racing—although racing is big enough—but the entire equine leisure industry that they will be supporting.

Lord Smith of Hindhead: My Lords, I rise to make a contribution to the debate which will be—using racing terms, which everyone else has employed—more   of a six-furlong gallop than a one-mile chase, with a couple of questions that I suppose could be described as hurdles, as my noble friend Lord Astor did, but, I suspect, ones that are not too high for the Minister to clear. My apologies in advance if I echo some of the points already made, or make some points that other noble Lords were hoping to make.
Like many other members of your Lordships’ House, I support the UK racehorse industry. We all know the figures, but they are worth repeating as they are really impressive. It has almost 6 million spectators per year—the most popular spectator sport after football. Horseracing contributes £3.45 billion to UK plc each year and, of that, the total fiscal contribution from betting to racing stands at about £270 million per year. The combined direct, indirect and associated employment of the industry runs north of 85,000 people.
As horseracing is such a popular British sport, it is only right that we do all we can to ensure that, as far as possible, it continues to be profitable, successful and beneficial for everyone concerned—both centre stage and behind the scenes—who puts on such great sporting entertainment, enjoyed by hundreds of thousands of people every week of the year.
It is for this reason that I support the work the Government have done over the past few years on rethinking the racing levy, a rethink that is long overdue, bearing in mind that the current arrangements are based primarily on the Betting, Gaming and Lotteries Act 1963, as amended. I should point out that I, too, might need to have a long overdue rethink, having had a disastrous Grand National this year, ignoring my grandfather’s advice, which I mentioned in another debate, that the best way to double your money is to fold it once and keep it in your pocket.
Noble Lords who take an interest in this subject are aware that the levy is a complex structure, involving many stakeholders with many different needs, but I consider the Government’s new funding arrangement to be both sensible and fair. I particularly praise Ministers in the other place and my noble friend on the move to include offshore betting operators in the contributions which are collected. These operators benefit from our UK racing, so it is right that they should also contribute to the industry, just as betting operators in the UK have to. For far too long, operators in the UK have been trading at a disadvantage, and I am therefore happy to see the playing field being levelled—something that is essential in any form of fair gaming.
I hope that the principle of collecting contributions from offshore betting operators who benefit from UK players and sports can be extended to other forms of gambling, but I appreciate that that is a debate for another time.
I am aware that there are changes to the role of the Horseracing Betting Levy Board whereby, under the new plan, the board will be responsible only for setting the levy—or, as it will be known, the racing right—and enforcing it. A racing authority will be established to be in charge of distributing funds.

Lord Lipsey: My Lords, I declare an interest as half-owner of Fearless Fantasy, which takes a chance in the bumper at eight o’clock at Exeter tomorrow, which happens to be my birthday.
The House is indebted to the noble Viscount, Lord Astor, for giving the Government a chance to give a straight answer as to what has happened to the racing right. Noble Lords will remember that the racing right made a cameo appearance in the 2015 Budget speech to give the Chancellor’s friend Mr Hancock something cheery to tell his Newmarket constituents at the general election. That purpose has been served, so, in the immortal words of Monty Python, the racing right “is not pining, it has passed on, it is no more, it has ceased to be, it has expired and gone to meet its maker”. As it was unworkable, unfair, and probably illegal, thank God for that.
What takes its place? In March 2016, the Government published perhaps the thinnest paper in the history of Whitehall, Implementing the Replacement for the Horserace Betting Levy. I have studied it, but I have no clue what it proposes. I commend to the House the briefing by Olswang’s Dan Tench, a leading gambling lawyer, which asks six crucial, fundamental questions that the document utterly fails to address. These include:
“The need and/or justification of any levy or funding for Racing in light of the revenue it now receives in terms of the sale of media rights”.
Even if the Government find an answer to Mr Tench’s six questions, which they show no inclination to yet, they will face the fundamental problem of getting European state aid approval—odds against, if not long odds against.
So here is a puzzle. What is the answer to Mr Tench’s question? Why are this free-market Government proposing a massive new intervention in the market in one case and one case only—horseracing? They are not doing it for greyhound racing, you will notice, but they are doing it for horseracing. I am afraid that the answer is all too simple and predictable. There is one principle which Ministers in this Government hold even more dear than free-market economics: that money should be taken from the poor—that is to say, poor punters in betting shops—and given to the rich owners, such as me.

Lord Risby: My Lords, I recently became a government-appointed director of the Horserace Betting Levy Board, which has acted as a bridge between betting and racing interests. At times these relationships have been positive and at other times very much less so. It is also my privilege and pleasure to have represented Newmarket in another place, so my interest in all this is very long-standing. However, inevitably, there have been problems for both sides and for the Government in the growth of online betting, a substantial amount of which has been taking place offshore. The traditional betting shop has become less and less profitable—and, of course, there is much greater diversity in betting opportunities. For the Government, at times having to make a levy determination is inappropriate and most unwelcome. For racing, the issue of prize money,  relative to the costs of racehorse ownership, remains a source of concern. As a former part-owner, I am acutely aware of this.
The levy board collects levy contributions only on bookmakers located in Great Britain and only on profits generated here. Offshore betting has inevitably reduced the ability of the levy board to pass on resources, and it is very important that in future education and training, veterinary research and other aspects of equine life are to have continuing support. Thus reform affords an opportunity to deal with two key issues—first, to create a structure that will, one hopes, minimise any further disagreement between the two sides and remove direct government involvement. We shall know shortly what data and analysis have been deployed for this new architecture, provided by Frontier Economics. Could the Minister update the House on when that work is likely to be forthcoming?
Additionally, and importantly, I applaud the assurances from all sides that they will work with the Government to develop the details of the new proposed funding system, to broker a deal in practice to their mutual benefit. I look forward to further comments and details about this from my noble friend the Minister. Horseracing gives pleasure to millions; we have the finest racing industry in the world, and the creation of a new structure to maximise its attractiveness and sustainability is to be clearly welcomed. I wish the Minister well in bringing the process now under way to a satisfactory conclusion.

Lord Trees: My Lords, I welcome the proposals to modernise the current levy system to ensure that the British racing industry receives due revenues from all sources of betting. It will help to maintain the health of the British racing industry, which currently contributes some £3.5 billion per year to the British economy. But I want to focus on the health of something else—the horses, on which the whole industry depends—and to highlight the importance of the support provided by the Horserace Betting Levy Board to racehorse health. Since its inception in the 1960s, the HBLB has contributed some £50 million to equine veterinary research and education. It is vital that such support is maintained by the new arrangements, not only because the industry depends on the health and welfare of its racehorses but because there are no alternative funding sources of such support, with the exception of one or two charities, such as the Horse Trust.
The major funders of biomedical research in the UK, the Research Councils UK and the Wellcome Trust, do not generally support equine health research, nor specialist veterinary education, as provided by the HBLB Veterinary Advisory Committee. Over the last 15 years, racecourse horse fatalities have decreased by about one-third, to a substantial extent as a result of HBLB-funded research. Major advances have included the recognition of micro-fractures and their early diagnosis by advanced imaging, which has enabled horses to be retired before the possibility of catastrophic major bone fractures during racing. The epidemiological study of race injuries has led to improvements in course  design and preparation, such as the investment by racecourses in watering systems to soften the going. There have also been major advances in infectious disease control. There has not been a race meeting cancelled because of an outbreak of infectious disease among horses for 20 years—a tribute to disease surveillance and the development of efficacious vaccines, such as the equine flu vaccine. In addition to these and many other research benefits, the HBLB has funded the education and training of equine veterinary specialists.
The continuation of this support is essential and should be given through a body that is transparent and independent, analogous to the HBLB Veterinary Advisory Committee. Can the Minister assure this House, first, that the level of current funding for equine veterinary research will be maintained or even increased by the proposed new arrangements and, secondly, that such funding will be administered by a body that is independent? Let us not forget that the health of racing depends on the health of the horses on which it relies.

Lord Suri: I thank my noble colleagues for securing the time for this debate. This is an issue of great pertinence for me. Before I came to this wonderful country, I had an interest in horseracing. During my stay in Kenya, I used to import weekly racing journals and horseracing papers for reselling through my bookshop. British horseracing has the longest pedigree in the world, and, like our own English Premier League, is widely regarded as the best in the world. Having noted this, I was glad to hear of a change in the law in the 2015 Budget to reform the 1963 horserace betting levy with a new horserace betting right. Some 200,000 people are employed in jobs linked directly to horseracing, as well as all the downstream jobs and multiplier effects; 86,000 are employed in breeding alone. If we want to protect those jobs, which often tend to be concentrated in small rural communities with few other sources of gainful employment, we must secure a viable and long-term funding mechanism.
Many people watched and had a flutter on the Grand National two weeks ago. Whether they were successful or not, many would have placed their bets on non-domicile remote gambling operators, and would have paid nothing towards supporting the industry. This loophole, according to the industry’s own figures, costs around £26 million a year, money that is desperately needed for long-term investment to provide a secure future for British racing. I hope that the Ministers responsible will be bringing forward legislation sooner rather than later, as the industry loses money with every passing event under the current system. I also hope that this new levy will not be taxed by VAT under EU rules, as this will reduce the money paid to racing, or increase the cost to bookies, who will pass it on to the consumer. Also, it would mean that non-EU betting firms would be exempt from VAT, making them cheaper to bet with than our own bookies. This consultation ought to be wrapped up soon, and I look forward to having the opportunity to vote on legislation that will secure a good future for British racing, and remove the Government from the picture permanently by cementing the relationship between racing and betting.

Lord Donoughue: My Lords, at a canter, I wish to congratulate the noble Viscount, Lord Astor, on raising this important issue and to declare my interest, as in the register, as chairman of the Starting Price Regulatory Commission and of the report on the future funding of racing which concluded that we should replace the levy, but that it would provoke problems and legal challenges.
Fortunately, much progress has since been made and I welcome the new funding arrangement. I trust that it will maintain the historic balance between the genuine financial needs of the racing industry and the capacity of bookmakers to pay, noting that they are under more pressure than at any time in my lifetime, and that we will resolve any legal challenges and the familiar problem of European Union state aid.
Of course, we might avoid many of these problems if we take the free market approach so lucidly expressed by my noble friend Lord Lipsey. His experience is greater than that of most Members in this House. I have worked with him as a colleague and friend for 40 years, and I usually take his advice and recommend his racing tips, as at Exeter tomorrow. On this issue, I will not tangle with his arguments but will simply say that I am reluctant to ignore the guaranteed financial aid for the sport of racing, which I love. I am confident that that money will eventually go to very capable hands in the modern racing industry with its modern leaders—I have in mind people such as Nick Rust and Simon Bazalgette—among a new breed of professionals running the racing industry so well today. I have confidence in them.
In proposing this extension and simplification of the levy, it is now most important that the DCMS meets the April 2017 deadline to deliver its levy solution. That tired departmental horse needs a heavy whip over the final furlong to the winning post. It is much more practical to resolve the offshore tax problem than to pursue the complex journey of the original racing right, which I, too, never understood. We may face difficult but familiar legal challenges, including European state aid and negotiating a tax rate that bookmakers can afford, but I trust that they can be overcome, together with all the very pertinent questions raised by the noble Viscount, Lord Astor, so that racing can benefit and the often maligned bookmakers can continue to flourish so that each can benefit when both prosper.

Baroness McIntosh of Pickering: My Lords, it is often said that racing is the sport of kings, and I can think of no better time to debate this than on the eve of Her Majesty’s birthday. Racing makes a massive contribution to the rural economy of north Yorkshire and many other parts of the country in terms of employment, tourism and enjoyment of the countryside. It is obviously a source of concern that the yield from the horserace betting levy has fallen from an average of more than £106 million a decade ago to a forecast of approximately £55 million in 2015-16. This puts real pressure on the future of funding for racing. Yorkshire has nine of Britain’s 59 racecourses. Thirsk,  Malton and Middleham represent some of Britain’s largest racehorse-training centres. They have been synonymous with racehorse training for 300 years and are home to some 45 licensed trainers and approximately 1,500 racehorses as well as to many stable lads and lasses.
I hope we can have an assurance from the Minister this evening that the Government will stick to and respect the very tight timetable and that a statutory instrument will be presented to both Houses to be voted on using the affirmative procedure before the end of this year after clearance by the Commission, following the precedent of the ruling on the French parafiscal levy on online horserace betting. When my colleague Matthew Hancock was elevated to the government Benches, I was delighted to steer an embryo Bill, which unfortunately did not pass all its stages, in the House of Commons. I am delighted that the Government have run with this. I hope that it will end the move to offshore betting and will secure the future for racing for many years to come.

Lord Collins of Highbury: My Lords, I hope that tonight, unlike in recent days, the Minister and I will be able to agree. I, too, thank the noble Viscount, Lord Astor, for initiating this debate. When the House debated the Gambling Bill two years ago, I was pleased to add my name to the noble Viscount’s amendment on the horserace betting levy. The debate reflected genuine cross-party support for the levy and the principles that underpin it. There might have been cross-party support, but there was some dissent within the party, and we have heard that tonight.
Our achievement was followed by consultation processes on extension, reform and the new right. The Chancellor announced in his March 2015 Budget that the Government would,
“support the British racing industry by introducing a new horse race betting right”.—[Official Report, Commons, 18/3/15; col. 776.]
While we have not received what we hoped for, the Opposition welcomed the Government’s announcement last month and the further detail published on 16 March to ensure that all betting operators contribute to racing. Labour has been calling for action for a number of years and I am pleased to see that the Government are finally acting. Despite the potential opposition from the betting industry, we believe that the Government should use this opportunity to consider a wider sport betting right to support the grass roots of sport to ensure that all sports are compensated by gambling for the use of their intellectual property.
What is often overlooked is the work on training, education and employment initiatives that the levy supports. Also overlooked is the broader picture of how the racing industry has a direct link into building sustainable rural economies, as we have heard in tonight’s debate. There are a number of brief points that I would like the Minister to address, particularly on the EU Commission clearance that is required. It is important that the racing industry is properly consulted during the notification process.
I also understand that the Government have commissioned Frontier Economics to undertake an independent analysis of the common interest costs  between racing and betting. Does the Minister expect that report to be concluded by the end of this month? While I appreciate that the Government recognise the urgency with which a new funding model for the sport is required, there remains a significant amount of work in order to meet the April 2017 deadline. Like other noble Lords, I would welcome further information on the specifics within the timetable and on what contingencies will be in place should the timetable begin to slip.

Baroness Neville-Rolfe: My Lords, I thank noble Lords for their valuable contributions to this informative debate. I particularly thank my noble friend Lord Astor and the noble Lord, Lord Collins, for the amendment they moved to the Gambling Act 2014 which underpins our proposed changes. In a sense, they were the midwives to the proposals in the paper that we have recently issued.
The racing and betting industries in this country have a unique interdependency going back more than 200 years. For most racegoers, their day out would be incomplete without a bet on the horses; it is a major part of British cultural life and heritage. While preparing for this debate, I was watching the Grand National, which is the toughest betting race. How happy the bookies must have been as Rule the World overtook the favourite; I am very sorry that my noble friend Lord Smith had a bad day.
There are almost 60 racecourses spread across Britain. This is my first debate on racing but I have been to quite a few racecourses. I have been to York—I did not know that there were eight others to go to in Yorkshire. I have also been to Ascot, Newmarket, Salisbury, Wincanton—and Chepstow, for those of us who love the Welsh. Each course plays a part in supporting local communities in driving inward investment, which is very important, and creating jobs. From recent stars such as the wonderful Golden Horn—see my Twitter account—to classic names such as Frankel, the British racing industry continues to produce exceptional talent. To ensure that this great British success story continues to prosper, it is vital that the entire betting industry makes a fair contribution to a sport from which it profits.
The mutually beneficial principle of transferring funding to racing from the proceeds of betting under statutory arrangements dates back to 1928. But the current levy system is, I think we all feel, broken because it does not apply to bookmakers who are based offshore. Following the introduction and rapid growth of online gambling, this has meant that more and more potential funding is falling outside the scope of the levy.
We have an unsatisfactory, two-tier system where British-based bookmaker A must pay the levy, whereas bookmaker B, based offshore but otherwise in identical circumstances, does not. Statutory contributions have declined steadily, as has been said, and amounted to just £60 million last year. However, a number of bookmakers make voluntary contributions, which I welcome.
Last month we set out our plans for new funding arrangements for British racing. This will ensure a level playing field and a fair return to racing from all gambling operators, regardless of where they are based. The funds will be passed to racing to make spending decisions and will benefit all those who play a part in enabling horseracing on which betting takes place. This includes racecourses, breeding groups, veterinary groups, trainers and, of course, stable staff.
Investment in the equine veterinary profession, disease control, watering of courses and the role of the HBLB—I may have got that wrong—is very important; it was raised by the noble Baroness, Lady Mallalieu, and some of my noble friends. It will be for the racing industry to make decisions on the spending of funds. It is in the interests of racing as a whole that the funds raised benefit the entire industry. The current levy has supported the advancement of veterinary science, and I very much hope, as do other noble Lords, that that will continue.
As my noble friend Lord Astor rightly said, racing is a huge industry contributing £3.5 billion to the economy. There are 85,000 direct and indirect jobs associated with it, including the 6,500 stable lads and lasses whom we heard about from the noble Baroness, Lady Mallalieu. Attendance rose to 6 million last year, so we are talking about a very popular sport. My noble friend Lord Suri added his own experience to that picture.
My noble friend Lord Astor also mentioned the oncourse industry. Oncourse bookmakers have a distinct and unique position in the betting and racing sphere; they have a vital role in providing better services for customers at the racecourse. We are considering how best to factor oncourse bookmakers into the new arrangements, and we will hold further discussions with that sector on this issue.
As to how the rate will be set, the rate payable by bookmakers will be informed by independent economic analysis and further consultation with betting and racing. I will say a little more about that later. That will take account of all sources of revenue, including media rights, to pick up a point made by the noble Lord, Lord Lipsey. I did not agree with every point that he made on this occasion; I do not think that he meant it seriously, but a purely voluntary environment would mean that not all betting operators would continue to contribute.
With regard to whether the rate will be assessed against a bookmaker’s turnover or gross profits, this is a point that we will be discussing with the industry. The current method, based on gross profits, has been in place for more than a decade. It is consistent with the approach taken to general betting duty. With regard to VAT, respondents to the consultations on the future of the levy raised serious concerns around the application of VAT to the racing right model. I am pleased to say that, as with the current system, whereby levy payments do not attract VAT, the new model will retain this key benefit. The racing authority will be set up by the racing industry and will be responsible for making spending decisions in line with the overall purposes of the scheme, and with an appropriate reporting mechanism. This body will be referred to in legislation but it will not be a statutory body.
The necessary changes will be made by secondary legislation, as has been said, using powers in Section 2 of the Gambling Act 2014. The regulations will, of course, be subject to the affirmative procedure and will therefore require debate and approval here and in the other place. I am not sure whether I can promise to hit the 2016 timetable referred to by my noble friend Lady McIntosh, but I can take the House through the timetable as I see it.
This is spring 2016—it is wonderful outside—and following analysis from Frontier Economics, we will begin discussions with betting and racing industries to inform the level of contributions from betting. To reply to my noble friend Lord Risby, Frontier Economics is due to report to Ministers later this month, and I think that it is reasonably on track.
Secondly, we have set aside summer and autumn this year for the state aid notification process with the European Commission. A good point was made about how it can be valuable to consult during that process. This particular area is not one that I am dealing with ministerially but I will feed that back because, having dealt with other areas, I know very well how valuable stakeholder engagement can be in getting the right arguments and moving things forward efficiently.
We are planning to publish the statutory instrument and a full impact assessment by the end of 2016—which the noble Lord, Lord Stevenson, who I see is in his place, will be glad to hear. That will enable us to bring the new funding model into force in April 2017, which is what we are hoping to do. There will be no formal role for the Bookmakers’ Committee in the new system, but racing and betting have shown that they can work together and I hope that such co-operation will continue.
My noble friend Lord Astor also asked what dispute mechanism would be in place. With the rate set by the Government, there will be less room for disputes in the new arrangements. However, we will retain the existing dispute and enforcement mechanisms, which I think are well respected.
I come back to the important subject of state aid. The levy has not been subject to an assessment under state aid rules because, as I think has been said, it originated before our accession to the European Union. The new arrangements will also cover the offshore market, and we want to ensure that the new system is sustainable and can last for a number of years. It is therefore prudent to seek clearance, which will provide certainty for all parties.
On the subject of timing, we have already begun informal conversations with the European Commission. That is why we believe that April 2017 is both a realistic and an achievable target. I think I have already said that we will ensure that the industry is kept in touch as that process takes place. I was given some comfort when talking this morning to the officials who are involved in the early stages of that state aid process.
I thank my noble friend Lord Risby for his valuable contribution. I have already explained the timing and said that Frontier Economics is making good progress. Following consideration of the report, the Government will meet the betting and racing industries to discuss the level of contributions from betting to racing.
The noble Lord, Lord Lipsey, asked about other sectors, particularly greyhound racing, which I know he is very passionate about. I have not been to greyhound racing for a very long time, and this reminds me that that is something I should try to do in my ministerial role. He may be disappointed to know that we have no plans to widen the scope to apply to other sports. However, we have expressed a desire, which I very much endorse, for both industries to agree a mutually beneficial voluntary arrangement that demonstrates a fair and just return to that sport. I should perhaps confirm that the Government have no plans to introduce a sport betting right.
With the extraordinary growth of online betting, the current levy system is fair to neither betting nor racing. The new funding model that we have discussed today will create a level playing field between all gambling operators. It will provide a fair return to racing and will ensure that our proud and vibrant racing industry can continue to produce world-class racing for generations to come. I thank my noble friend for securing this debate and look forward to discussing these issues further with him and other noble Lords in the weeks and months ahead.
Sitting suspended.

Housing and Planning Bill
 - Report (4th Day) (Continued)

Clause 137: Local planning authority to keep register of particular kinds of land

Amendment 107ZE
Moved by Baroness Andrews
107ZE: Clause 137, page 70, line 8, at end insert “, and in particular the achievement of sustainable development and good design”

Baroness Andrews: My Lords, we are a dwindling band but the issues are no less important. This amendment repeats the amendment which I laid as Amendment 98 in Committee to stress the need for brownfield sites to achieve both sustainable development and good design.
We brought the amendment back not only because we continued to see the need to reinforce and make clear on the record that the NPPF applies to brownfield sites on the register and that any developing local authority must therefore ensure that those sites exemplify all the positive and best aspects of place-making. We also brought it back to reiterate common concerns, inside and outside this House, that these new developments may fall prey to being a short cut to throwing up the sorts of housing estates that we hoped we had seen the last of that are identikit and, frankly, alienating. We want to ensure that developers who are under the cosh get the clear message that it is possible to build quickly but beautifully. There is nothing utopian about that—it can be done.
Sustainability means, of course, to build to sustainable environmental, social and economic conditions, and with regard to social sustainability it also means building  in that which reflects, incorporates and makes a working feature of the heritage of the site, to give new inhabitants of an old and much-worked site a sense that they too belong there in a new age. We often underestimate the importance of reflecting that sense of identity and belonging, yet it makes an enormous difference to how people feel about where they live.
That means that the second reason I have for bringing back the amendment is even more important. When we discussed it in Committee we had some exchanges about new town development corporations which led me to reflect that the NPPF might not apply to these new planning authorities and that, if they were to develop to their very best—in terms of the rare opportunity these developments offer to master plan to the highest standards—they most certainly should be under the same planning law. I am very grateful for the help of the TCPA in establishing this point. Again, I thank the Minister for the help she has given and thank her very helpful officials in this respect. They have confirmed that I was right to raise this as an issue. The duty to work towards sustainable development as set out in Section 39 of the Planning and Compulsory Purchase Act 2004 does not apply to new town development corporations. However, I am assured that in practice, as the Minister said in a letter to me,
“the Government does have the means to ensure that they have regard to the NPPF in drawing up its plan for a new settlement”.
She has suggested that this could be done, for example, through provisions set out in Section 7 of the New Towns Act 1981.
I will quote the rest of the Minister’s letter, because it is very important for the record. She says that she is,
“aware that there is a strong case to ensure that there are explicit statutory obligations on”,
new town development corporations,
“to work towards achieving sustainable development, in the same way as they are currently on a local planning authority. I am pleased to say that we will be bringing forward such proposals shortly”.
There will be amendments later on, possibly on Monday, on the same point, but it is apposite now to raise this issue on the amendment and to say again that I would be very grateful if the Government were able to say a little more about how this other loophole in the law might also be closed. I beg to move.

Lord Kennedy of Southwark: My Lords, my noble friend Lady Andrews has showed the House her expertise in these matters and I fully support her amendment. I do not have any more to say than that.

Baroness Williams of Trafford: My Lords, again I pay tribute to the noble Baroness, Lady Andrews, not only for eloquently outlining her amendment but for how she has contributed to this part of the Bill thus far. She outlined why she considers that this is an important opportunity to place a high-level obligation in the Bill to ensure that the brownfield register contributes to sustainable places. I fully agree that local authority decisions should consider sustainable development and good design but I hope I can outline why the amendment is not needed.
This clause will already require local planning authorities to have regard to the NPPF when, for example, making decisions about sites to include in local registers. As we discussed in Committee, the framework makes clear that sustainable development should be at the heart of both plan-making and decision-taking. I emphasise that placing a site on a register is not a permission to build—but I am sure that the noble Baroness knows that. The consideration of detailed issues, such as design, will not be feasible at the point that sites are entered on to the brownfield registers. That will come later. Applicants will be responsible for providing detailed information when they submit their applications for technical details consent. This will ensure that design is also considered before consent is granted in the same way as it would be for a planning application.
The noble Baroness raised the applicability of sustainable development objectives and the NPPF to new town development corporations. As she will be aware, we announced in the Budget our intention to legislate to better support the delivery of new locally led garden towns and villages. We want to ensure that they exemplify high design and sustainability standards. It is absolutely our intention that when we legislate we will ensure that sustainable development objectives and the outcomes set out in the NPPF apply with no less force to new town development corporations than they do to local planning authorities in general.
I also point out that it is the applicant and not local authorities who should bear the cost of providing detailed information in support of their application. Placing a stronger emphasis in the Bill could result in unnecessary burdens being transferred to local authorities. I emphasise that our proposals for the brownfield register or permission in principle do not change the protections in the NPPF in respect of sustainability or design.
I hope that I have been able to articulate our position and that the noble Baroness feels able to withdraw her amendment.

Baroness Andrews: I am very grateful to the noble Baroness. Having read the contents of her letter, with its commitment to provisions set out in Section 7 of the New Towns Act 1981 and how they can be brought forward, I take that as a commitment—even if she cannot say so at this moment—that something will reflect that in forthcoming legislation. She is nodding and I put that on the record. With that assurance, I am happy to beg leave to withdraw the amendment.
Amendment 107ZE withdrawn.
Amendment 107A not moved.

Amendment 107B
Moved by Lord Lucas
107B: After Clause 139, insert the following new Clause—“Planning freedoms: right for local areas to request alterations to planning system (1) If the following conditions are met, the Secretary of State may by regulations make a planning freedoms scheme, having effect for a specified period, in relation to a specified planning area.   A “planning freedoms scheme” is a scheme that disapplies or modifies specified planning provisions in order to facilitate an increase in the amount of housing in the planning area concerned(2) The first condition is that the relevant planning authority or authorities have requested the Secretary of State to make a planning freedoms scheme for their area.(3) The second condition is that the Secretary of State is satisfied—(a) that there is a need for a significant increase in the amount of housing in the planning area concerned,(b) that the planning freedoms scheme will contribute to such an increase, and(c) that adequate consultation has been carried out.(4) The third condition is that—(a) the relevant planning authority or authorities have prepared a summary of the views expressed in the consultation referred to at subsection (3)(c), and(b) the Secretary of State has considered that summary.(5) For the purposes of subsection (3)(c) consultation is “adequate” only if—(a) the relevant authority or authorities publish an explanation of what the proposed planning freedoms scheme is expected to involve, and(b) persons in the planning area concerned, and other persons likely to be affected, have a reasonable opportunity to communicate their views about the proposed scheme.(6) The Secretary of State may decide to restrict the number of planning freedoms schemes in force at any one time (and accordingly is not required to make a scheme merely because the conditions in this section are met).(7) The Secretary of State may by regulations bring a planning freedoms scheme to an end, and must do so if the relevant planning authority or, as the case may be, any of the relevant planning authorities so request.(8) In this section—“planning area” means the area of a local planning authority, or an area comprising two or more adjoining areas of local planning authorities;“planning provision” means a provision to do with planning that is contained in or made under any Act;“relevant planning authority” means the local planning authority for an area that is or forms part of a planning area;“specified” means specified in regulations under subsection (1).”

Lord Lucas: My Lords, I wish to claim a record. I have just seen the first clothes-moth of the spring so, now that the weather is warming and clearly the Minister is warming to the amendments being presented, I very much hope that I shall be on a run here following the success of the noble Baroness, Lady Andrews.
I apologise for the introduction of a manuscript amendment at a late stage but this is due to constructive conversations with the Minister’s colleagues as to how we can put something in the Bill that enables local initiative to be given more scope than it is at the moment. My inspiration for this was the Wolfson Economics Prize in 2014. The winner was Oxford—a well-known Labour council—and the runner-up was Shelter, which is also not listed as a government supporter. So this is not a partisan amendment but is based on a  thoroughgoing belief that local decisions, local plans, local ideas and local wishes as to how an area can best develop and contribute substantially to providing more housing are things that we should encourage. I think that the amendment provides a good way of doing that.
There is a supplementary amendment to come on Monday which will make this subject to the affirmative resolution, and another one to make sure that hybridity is dealt with. At this late time of night, I shall leave it at that, other than to very much thank the noble Lord, Lord Taylor of Goss Moor, who stepped in to move my amendment in Committee when I was laid low with a bad back, and the noble Lord, Lord Kerslake, for his consistent support. I beg to move.

Lord Kerslake: My Lords, I support the amendment. Indeed, I added my name to the previous version of this amendment but was not quick enough on the draw to add it to this latest version. Among the very many amendments that we have seen, this is a genuinely original and, I think, positive proposal. It is in every sense localist.
Before I move on, I should declare my interests as chair of Peabody, president of the Local Government Association and chair of the London Housing Commission.
I have felt for some time that we make progress on these issues through local initiative and through learning from different models in different parts of the country. Indeed, I think that that is exactly how we developed the model for city deals through the Localism Act. Proposals came forward for permissive powers to enable local authorities to make proposals for the Secretary of State’s approval. That set of amendments, sponsored by the Core Cities Group, paved the way for what I think has been an entirely positive process of city deals and devolution of powers according to local need.
This proposal opens up the opportunity to try new models at local level and to give local places, whether it is an individual local authority or a set of combined authorities, the chance to take the initiative. There are safeguards which have been strengthened: first, it would be through affirmative regulations, as we have already heard; secondly, there would need to be consultation; and thirdly, of course, the Secretary of State would need to give approval to any proposal. The test here is whether in a situation where there is high need for housing, and where the proposal envisages more housing being possible through the alternative, we should give them the freedom to try this out. In my view, very clearly we should.
There is an added reason why I am very strongly in support of this amendment, and that is to do with the issues in London. Noble Lords will be aware that I chaired a commission on the housing crisis—I think it is a crisis—in London, which looked at issues of how supply in London might be doubled over five years and then held there. Nothing less than that will address the issues in London. The overwhelming conclusion of our panel was that it was simply not possible to deliver this scale of change without a new, significant package of devolution to the London mayor and the London boroughs. One part of that devolved model is greater powers on planning. This amendment would open up  the opportunity for a new devolution package in London and the opportunity, I think, to tackle a growing and desperate crisis. I hope that this proposal is sympathetically considered by the Government.

Lord Shipley: My Lords, I note that this amendment has been supplied to us only today in the form of Amendment 107B, having previously been Amendment 107A. The basic thrust behind the amendment is broadly the same but the wording has altered. I had some doubts about Amendment 107A, and I still have those doubts. Perhaps, in replying, the Minister or the noble Lord, Lord Lucas, could explain the position. I do not want to see one of the cornerstones of British democracy, which is the town and country planning system, upended by this amendment. Certainly the previous version, particularly subsections (1) and (3), was very worrying. Those subsections have been altered in Amendment 107B, but a number of questions still arise.
The first question is around how neighbourhood planning fits with this structure. A great deal of emphasis has been placed on the importance of neighbourhood planning. However, I am looking at subsection (3)(c), subsection (4)(a) and subsection (5), and although they refer to consultation that is deemed to be adequate, there is no indication of what “adequate” consultation is. Nor is it clear what would happen if the local reaction of a neighbourhood is very negative to a proposal. It is also not clear how the summary views expressed—let us suppose that 90% are against—will be considered by the Minister. That is one aspect of this that causes me concern. I do not really understand how we can have a system of neighbourhood planning and then alterations to a planning system, as proposed in this amendment.
Secondly, there is the issue of sustainability. I do not understand to what extent planning freedoms would mean that a local area could disregard issues of sustainability. I am thinking of issues around drainage and water supply, but there are other examples. I feel uncertain about exactly what is being proposed here and why it is deemed to be so important, with an assumption that the current planning system cannot deliver the answer that is required: to build more houses. We already heard earlier, in the debate about the neighbourhood right of appeal to a planning approval on neighbourhood planning, that 10% more homes are being built in areas with neighbourhood plans than would otherwise have been the case.
I am struggling to understand what problem the mover of this amendment is attempting to solve. It would help enormously to have some concrete examples to work with. When I hear about combined authorities, which are huge structures that do not have much connectivity with electors, I wonder how this will build public confidence in the current planning system.

Lord Beecham: My Lords, I also come to this without a full appreciation of the implications. In particular, I wonder whether schemes would be able to depart from what might become requirements elsewhere;  for example, in relation to energy efficiency or other aspects that one would expect to be part of planning consent for new schemes.
I do not quite understand what the decision-making mechanism would be. Once the scheme had been floated, would it still involve applications having to be approved within the new framework by something equivalent to a development control committee or sub-committee of the kind that most councils now have, or is it to be a sort of executive process without member involvement at the level of individual local authorities or perhaps a combination of authorities when one is looking at a wider area? It is not quite clear how the practical side would be handled.
I share the doubts of the noble Lord, Lord Shipley—if not doubts, then questions—about the nature of public involvement and how that would be fed into the process. Can the noble Lord identify any experience in another jurisdiction—one which is somewhat analogous to ours—of this kind of approach? Is there experience of this way of dealing with applications that we might learn from in terms of how it might develop here? I would certainly be interested in seeing the matter progressed, but I do not think that we have enough information positively to affirm that it should go forward as part of the Bill—it is a bit early for that without knowing a good deal more about how it might work. It may be that some further indications can be given and the Minister wants to take the matter back, although not necessarily with a view to dealing with it in a week’s time at Third Reading—we are pretty late in the process to bring something as potentially radical as this into the Bill. Even if it does not go very far on this occasion, it is certainly a concept that is worth exploring, but if I were the Minister, I do not think that I would be jumping at incorporation into the Bill quite at this stage. However, she may have a different view.

Baroness Williams of Trafford: My Lords, I thank my noble friend Lord Lucas for his amendment and the noble Lord, Lord Taylor of Goss Moor, who moved it in his absence just before the Easter Recess. The noble Lord, Lord Lucas, had a bad back at that stage and half the noble Lords who are interested in this Bill were somewhat indisposed, but I am glad that everybody is now feeling much better. We may well, of course, be ill before Prorogation. I also thank the noble Lord, Lord Kerslake, who spoke as well.
My noble friend made some interesting arguments about the benefits of this model. He made a compelling case for the leadership role of local authorities and their ability to innovate in a way that reflects the needs and voices of their local communities. There is also a pressing need to build new homes, and I am strongly convinced of the importance of the role that local authorities play in that. I am therefore open to new approaches such as this which might achieve our dual obligations of housing growth and localism. I want also to reflect further on how a model such as this might be used in practice—both the noble Lord, Lord Shipley, and the noble Lord, Lord Beecham, raised some questions which are worthy of consideration.
My noble friend has made it clear that his amendment is simply enabling. If a clear case could be made for the circumstances where these measures might apply, such circumstances would need to be set out in regulations which would have to be debated in both Houses. On that basis, and with those checks and balances in place, I am willing to accept the amendment at this stage, but subject to considering further whether any technical adjustments are needed for the remaining stage of the Bill.

Lord Lucas: My Lords, I am very grateful to my noble friend for her response. I thoroughly appreciate what noble Lords opposite have said. The winners of the Wolfson Economics Prize in 2014 were big schemes, but they were very much supported locally. They clearly did not go through the processes that are envisaged in my amendment, but the Oxfordshire scheme was 150,000 houses. It was supported by Oxford City Council in its generation, and the Shelter scheme in the Medway was of a similar size. These are transformative schemes and it is quite difficult, I am told by those who supported them, to see how one fits them within existing planning law.
At the same time, we do not want, as the noble Lord, Lord Shipley, says, to completely reconstruct planning law bit by bit. I do not lay claim personally to deep expertise in this area, but my intention is that we should not be doing that. We should allow local areas to operate as standard bearers to look at something that really makes sense to them and has strong support locally, to take that forward and see how it goes. If they get it right then we will all learn from it and have a process that helps us advance planning law. If they do not get it quite right then it is what they wanted and they did their best but the planning arrangements for the rest of us remain as they were. I am for innovation and encouraging, above all, localism and letting local communities really have a say in what is happening to them and an ability to tackle things on a large scale where that is needed. That is something we should encourage.
I am depressed that it looks like my children will live in smaller houses than I did, and I live in a smaller house than my parents did. I think that that is pretty standard across the country. We ought, as we get richer, to have better and nicer places to live in. We need more innovation and more understanding to work out how all the conflicting demands of the environment and us as a society and individual people can best be met. I am a great fan in that context of local innovation. I am comforted by what my noble friend said. I do not pretend that this does not require further thought and consideration and I am certainly open to all suggestions on this.
Amendment 107B agreed.

Amendment 108
Moved by Baroness Gardner of Parkes
108: Clause 141, page 72, line 20, at end insert—“(1) Local planning authorities may make provision for the payment of fees or charges to them in respect of the performance of their functions and anything done by them which is calculated to facilitate or is conducive or  incidental to the performance of their functions, and may vary such fees or charges according to the value of the project concerned or any other material concerns.(2) Fees or charges under subsection (1) may exceed the costs incurred by the local planning authority in performing functions relating to the relevant project.(3) Local planning authorities shall retain any fees or charges paid in accordance with subsection (1), and use them as they see fit.”

Baroness Gardner of Parkes: In moving this amendment I will also speak to Amendment 116. Although they are on different subjects, they are very similar in that they are setting right something that is very wrong at the moment. The amendments would give local authorities more control over how they deal with the costs involved in handling planning applications. There is no doubt that handling a very large and expensive operation that may involve hundreds of millions of pounds is rather different in terms of cost to the council than handling a little room or basement extension that someone wants to add on to their house. At the moment, local authorities do not have that choice. It is wrong for people to pay the same amount. The council should be entitled to charge fees according to the work involved and the cost of the development envisaged.
The other point which I think will appeal to every council is that Amendment 108 provides that councils should have the right to retain the fees. At the moment councils are being burdened with more and more expense, and if something goes to appeal and they have to defend a case, it can be very costly. These discretions would be good.
Amendment 116 concerns retrospective planning permission. It is a different issue but again, the payment of fees arises. I have consulted a number of planning officers who say that the only way to discourage retrospective planning permissions is for people to have to pay more for them than for planning at the right time. They say that the reasoning is that if someone just goes ahead and does something, they may get away with it and not have to pay anything at all because it is not picked up. If it is found, it means that someone has had to go to more trouble to find the problem, so it is right that someone should be charged more. It should not be a question of a standard fee that people pay when they do things the right way; it should be a punitive fee to indicate that it was wrong not to have applied in the first instance.
Recently I have come across various expensive developments in London, sometimes involving historic homes where the problems are even more serious. People have been given planning permission to do a certain number of things, but they have gone right ahead and done everything else. Local residents are up in arms about what has been an attack on a special listed property. Although they could tolerate a modern extension which had been allowed, they think that it is going too far when certain historic parts of a building are attacked. I know that special provision already applies to historic properties.
The amendments are related in that they will both give councils the right to charge according to what they believe is right, with an additional charge in the case of retrospective planning permissions. Equally  important in respect of retrospective planning permission is the question why should someone just go ahead and do something. In the last house I lived in, it was agreed that the houses behind could have a certain angle of light and have an extra floor put on them. That happened with the first development—these were listed buildings—but then I saw the second one was being built straight up. I phoned the council and told them that the development was not being built in accordance with the planning permission. “Nonsense”, they said, “of course it is”. Some 18 months later when people had moved into that house, the chairman of the planning committee called me to apologise. He said that now that people had moved into the property and had gone to so much trouble, the council did not feel that it could do anything about it. That is pretty unsatisfactory for the people who have lost their light—someone just got away with it; that is what it boiled down to. I have had that happen to me several times in my life. It is more that someone feels that they can get away with something, so it is important that local people should be consulted because it is often those who live close to these developments who notice that something has been done that is not in accordance with planning. I beg to move.

Lord Foster of Bath: My Lords, I am very happy indeed to have my name associated with Amendment 108. The noble Baroness, Lady Gardner of Parkes, has eloquently set out the case. The current fee levels are determined centrally by government and they do not enable council planning departments to achieve full cost recovery. London Councils claims a shortfall of around £40 million a year, while we have heard from the noble Lord, Lord Porter, that the LGA estimates that the shortfall across the country is some £150 million a year. The fees were last reviewed in 2012 and the future is very uncertain. The Government consultation finished only at the end of last week, and we have no idea what the outcome will be.
I am sure many noble Lords were as pleased as I was to receive what has now become the almost ritual letter from the Minister just a few hours before each of our sessions debating the Bill. But I note that in today’s letter we are told that, because of the high response rate to the consultation, she is unable to share with us any information about what respondents have said or, indeed, how the Government will react. But the Minister has already admitted in answer to my questions in Committee—and it is repeated in the letter we received today—that it is likely that councils will get an inflation-based rise, with those deemed to be poorly performing getting even less. So the shortfall will continue, and many hard-pressed planning departments will be unable to give the quality of service they would like and that developers need and deserve.
The Minister offers in today’s letter one small glimmer of hope, where she refers to,
“greater fee flexibility for the truly radical”.
I hope she will be able to offer some insights into what she has in mind. I genuinely believe that councils are capable of radical approaches to service delivery—indeed, there are many examples that demonstrate this—but  the ability to set fees at a reasonable level must surely form part of any package. I simply cannot see any of the external agencies that the Government want to involve in planning process work being willing to undertake it if their fees are to be equally constrained. Yet, where planning departments have been allowed to charge realistic fees, such as for pre-planning applications, many have developed an efficient, speedy and high-quality service. Were councils able to charge realistic fees that at least recover their full costs for their main planning functions, I am confident that the quality and speed of work would improve, to the enormous benefit of developers. It should be noted that such fee increases would in the vast majority of cases be very small in comparison with the other very much larger costs incurred in any development of any size, and that the negative impact would be more than outweighed by the benefits of the improved service offered.
I know that some noble Lords will have concerns about subsection (2) of Amendment 108, which would enable councils to set fees or charges that,
“may exceed the costs incurred … in performing the functions relating to the relevant project”,
but there will be cases where planning fee costs, if at full cost recovery for a small development, may well deter that development. If the overall costs of the planning department can be spread so that larger developments take a little extra of the share and thus enable the fees for smaller developments to go ahead, we can have the best of both worlds. I say to the Minister that this would in no way be contrary to the requirements imposed on local councils in the Local Government Act 2003, which makes it clear that councils are under a duty to ensure that, taking one year with another, charges do not exceed the cost of provision. Therefore, taking a little less from some developers and putting a little more on others is perfectly legitimate in existing legislation.
The Government continue to claim that they support localism. They can demonstrate that by supporting the amendment. Should they fail to do so, I hope there will be an opportunity to test the opinion of the House, but I hope that will not be necessary.

Lord Kerslake: My Lords, I speak very briefly in support of the spirit behind the amendment and what is sought to be achieved. I will not repeat the arguments that have already been made, but I will refer to the experience I had during the London Housing Commission, where I consulted extensively with developers across every type and scale. The consistent and unanimous view of all those developers was that they were willing to pay more to get a better service.
What they described to me was a service that was truly struggling to do the job, where major and important applications were held up through the absence of good-quality staff and where they often experienced dealing with temporary staff who were learning on the job and did not have the authority to make decisions. This is, in any description you care to think of, a false economy. The improvement by way of inflation will be helpful but it does not go to the heart of the core problem, which is that, in the situation of severe funding challenges in local government, authorities  are unable to resource, in the way that is required, the level of planning services that we need to deliver the increase in housing supply.
I am absolutely of the view that there should be a link to performance here, but I also believe very passionately that we should give local authorities the local initiative and flexibility to set their own fees. Over time the consequence of this will be that they will be able to plan for increased resources and, crucially, recruit new, skilled staff and rebuild a profession which, in the public sector, has been severely reduced in its capacity.

Lord Porter of Spalding: My Lords, strangely, I am going to speak against the amendment, because of the second part. I am not sure why this amendment is not linked to the one about the private sector being able to compete against local government to do planning. In my mind they should go together. There is no way that the private sector will pick up any planning applications if it is only allowed to charge the current fee structure that we as councils are allowed to charge. That is because in the last three years the taxpayer subsidy to planning has been £450 million. The private sector will not engage on that.
Without the second part being in there, it would allow local government to be put in the right place to prevent the private sector being able to take the work at a subsidised rate for itself. The risk seems to be that, when we get to that part of Bill, private sector firms will be allowed to charge excessive fees and make money, safe in the knowledge that there will be an expectation that they will be more sympathetic to the applicant. I think a true level playing field would be one in which we charge full cost recovery and for those applications that are minor, where that would not be possible, there needs be a different mechanism. That is why I cannot support the amendment as written.
On the next amendment, on the retrospective planning application, again, we need some way to penalise serial offenders who wilfully abuse the planning system by not seeking planning permission in the right way when they first set out on their projects. Again, I am not sure how that should be worded in a way that will deliver it to best effect for everybody, because there will be genuine cases where some people simply were not aware that they needed to make a planning application. So any amendment must recognise that for me to be able to support it. As I have said before about any amendment that has “local government must” in it, there is no way I can support the third part of that amendment, where it says that we “must consult”. I do not think that local government ever “must” do anything. I think we should always “may” do something.

Lord Kennedy of Southwark: My Lords, I have considerable sympathy for the amendment moved by the noble Baroness, Lady Gardner of Parkes. I regret that we were not able to get Amendment 116BA into the same group, as it covers the same issues. It makes clear that local authorities may recover their full costs in respect of the work they are doing on planning applications, which is the intention behind this amendment as well.
I think it is important that councils are able to set fees that enable them to recover their costs, or at least a larger part of their costs, in undertaking the work they need to do to ensure that applications are processed efficiently. This would, of course, mean that for larger developments developers would pay more, or more realistic costs, than someone who wants to build an extension to their home.
I agreed with the noble Lords, Lord True and Lord Porter of Spalding, when they said in Committee that it is probably going too far to allow councils to make money out of the planning application process, but it is right that they should be able to recover up to all their costs, which is the intention of my Amendment 116BA, which we will come to later. I am disposed to test the opinion of the House on that if the Minister does not make a reasonable offer in that regard before Third Reading.
The noble Baroness, Lady Gardner, made a compelling point on Amendment 116, to which the noble Lord, Lord Porter, referred. At my last planning committee meeting, I recall that a public house in Blackheath was seeking retrospective approval for the substantial changes it had made to the fabric of its building without planning permission. It obtained the approval. We made it very clear to the applicants how unhappy we were that they were there in front of us, but that was all we could do. They got their permission and paid the nominal fees. It would be good if such applicants could be made to pay a little more, given the work that we had to do.

Baroness Williams of Trafford: My Lords, I thank the noble Lords and my noble friend Lady Gardner of Parkes for speaking to this amendment, which would allow local authorities to go beyond cost recovery. We currently work with the Town and Country Planning Act and the Local Government Act 2003, which places a duty on authorities, requiring them to ensure that, taking one year with another, any income derived from planning fees or fees from discretionary services does not exceed the cost of providing the service. However, what cost recovery means in practice in terms of fee levels and increases could vary widely. I am deeply concerned that this amendment, and another we will debate later, have no protections or safeguards to prevent local authorities setting excessive and unreasonable fees, leaving the potential for substantial increases in fees for applicants. My noble friend Lord Porter outlined some of the snags in this approach. Although noble Lords might argue about recovering costs, where is the protection for applicants that they are not simply funding a highly inefficient service, as he said? Without safeguards for applicants, this amendment, and the one we will debate later, are flawed. There are real technical challenges with the amendments we are debating. That said, it has been interesting to hear noble Lords’ comments, so I shall go into further detail about some of the issues raised.
I appreciate the strength of feeling on this issue, particularly from my noble friend Lady Gardner. It is easy to be seduced into thinking that resource and performance challenges in planning departments can  be resolved by localising fee setting. The arguments for and against local fee setting are more complex and nuanced than has been suggested. However, to give carte blanche to local authorities to recoup whatever their costs, whether or not they are efficient, cannot be right. This is why we want to test and learn from different approaches to fee setting to better understand how we can secure well-resourced and top-performing planning departments.
I shall set out why I am not convinced that allowing local planning authorities to set their own planning fee levels at this time is the answer to resourcing challenges. Local authorities have told us, supported by some evidence from the NAO, that there have been disproportionate cuts to planning services since 2010. Such local decisions suggest that additional income from local fee setting may not necessarily make its way into planning services, particularly against the backdrop of local government arguing for, and gaining, reductions in ring-fenced budgets and income. Local planning authorities are monopoly providers of planning services in their area, which does not provide much incentive to innovate, reduce costs and provide the most efficient and effective service. Local fee setting could compound this because it enables planning authorities to pass on their costs to applicants, despite any inefficiencies in their planning service. Fees could rise in a way that dissuades small or medium-sized developers from undertaking developments. Local authorities tell us that resource pressures are most acute in small development schemes, and fees for this type of development could rise proportionately the most significantly. While local authorities have transformed many of their services, they have been slower to transform their planning services. Those that have introduced new ways of delivering planning services have shown that performance can be improved and costs reduced.
We have set out three proposals for tackling resource pressures in planning departments. First, we have consulted on increasing national fees in line with inflation since the last fee increase in 2012 for those authorities that are performing well, with annual increases thereafter also linked to inflation and performance. We have also proposed testing the provision of greater flexibility in fee setting, on top of our proposals for national increases in fees linked to inflation, where local areas come forward with ambitious plans for reforms and improved performance. This could mean some limited, localised fee setting in a few areas or small additional increases in fees above inflation. This approach will allow us to test and better understand whether fee flexibility directly linked to service reform and performance can secure better planning services for communities and developers alike. We want to introduce pilots to test competition in the processing of planning applications. We think that the market might work best where service providers are free to set their own fees so we are minded, subject to consultation, to enable authorities in pilot areas to set their own fee levels.
Section 303 of the Town and Country Planning Act 1990 allows the Secretary of State to provide, in regulations, that local planning authorities can set  their own level of fees up to cost recovery. We already have the powers to enable local fee setting, but handing local planning authorities a blank cheque in this way does not guarantee a better-resourced planning department or incentivise authorities to drive down their costs. This is why we want to test the approaches that we are developing to tackle resourcing pressures in local planning authorities.
I have already set out that there are legislative provisions that prevent authorities from going beyond cost recovery. Additionally, the Government’s guidance on handling public funds, entitled Managing Public Money, states that charges and fees, such as those for planning applications, should be set at cost recovery so that the Government do not profit at the expense of applicants. The proposed amendment also does not have any safeguards—for example, to prevent local planning authorities from profiting from fees set at excessive levels that could dissuade applicants, particularly smaller ones, from bringing forward development—or any requirement on authorities to consult on fee proposals. I feel very strongly that it is up to local authorities to determine how fees are used and that the income generated from planning fees remains with the council.

Lord Shipley: My Lords, before the Minister sits down, I just want to say that we will be returning to this issue next Monday, as the issue of pilots and testing is in a later set of amendments. There is one under my name to be debated then. Does the Minister accept that local planning authorities are not recovering their costs now and does she believe, in principle, that they should be entitled to do so?

Baroness Williams of Trafford: My Lords, although there has been the ability for fees to go up in line with inflation, there is a general acceptance of the anecdotal evidence from local planning authorities that their costs are not being met, but we have to marry that up with performance and efficiency.

Lord Kennedy of Southwark: I know that we are going to come back to this next week but, before the noble Baroness sits down, can she confirm that, when we have all these reviews, she does not envisage a situation where we end up with the local authority being able to charge one set of fees for a planning application, while a lot more could be paid to another provider who could also do it but at a more expensive cost? I think that it would be totally wrong to allow there to be two levels of fees—you could have the council charging a fee but allow some other provider to do the same job for a larger fee.

Lord Shipley: Before the noble Lord sits down—that is actually the subject of the amendment that I shall be moving next Monday.

Baroness Williams of Trafford: My Lords, what we are discussing at the moment are fees that go beyond cost recovery. I am talking about efficient and effective local planning—

Lord Foster of Bath: I apologise but can the Minister explain why she keeps referring to us discussing fees that go beyond full cost recovery? She has  acknowledged that a local authority will clearly want development to take place, so there will be constraints on that authority not to set unrealistic fees that prevent the development going forward. But she has repeated what I said in repeating what she said during Committee: that the Local Government Act clearly states that a council cannot make a profit year on year from its services. There is a clear constraint in the existing legislation and I think that we all acknowledge that.

Baroness Williams of Trafford: My Lords, I am slightly confused now because Amendment 108 says that all local authorities may increase fees beyond cost recovery.

Baroness Gardner of Parkes: My Lords, this debate has been very interesting and it has certainly ranged widely. I still think it very important that fees should be related to the cost of the project. I cannot reconcile the small, individual application for something in your own home as compared to that for a multi-million pound development. There must be variation in that; there is certainly a big variation in the amount of work involved on the part of the council in considering the other type of application.
I was interested to hear from the noble Lord, Lord Kerslake, that people had said to him that in general they would like a better service. They were not so worried about the cost of it—that is, the person who has the big development. The small development person is very worried about their one little bit and would rather wait longer and pay less. But I can understand that if you are doing big business and hoping for a huge profit at the end of your project, speed is of the essence in getting it on and sold. The papers today tell us how this year will be a terribly bad one for London at the top of the property market yet last year—or it might have been the year before—was fabulous. Whenever it was, the people developing for a big profit are out to catch the market at the right time, so time is very important to them. If you are doing your own small building, you would rather be sure that you can afford to do it than suddenly pay an extra fee to get permission quicker.
The Minister referred to pilots. I would like to think that she really does have pilots under way and that we are going to learn something from them. I understand from what has been said that that will be discussed next week. I am therefore encouraged by her saying that these pilots are being worked on. I will reserve my views and not press this amendment tonight because it is late. A lot of interesting points have been raised and I would like the opportunity to discuss this matter with the Minister. I would also like to see the result of the debate on pilots next week but, as there are not enough Members left in the House to give us a true vote tonight, I beg leave to withdraw the amendment.
Some Lords objected to the request for leave to withdraw the amendment, so it was not granted.

Amendment 109
Moved by Lord Dubs
109: After Clause 141, insert the following new Clause—“Code of practice for subterranean development works (1) A local planning authority may promulgate a code of practice on the excavation and construction of a subterranean development with a view to lessening the adverse impact of the excavation and construction on adjacent properties and their owners and occupiers and on the wider neighbourhood.(2) The code may include, but need not be limited to, the provisions listed in Schedule (Provisions in local authority code of practice for subterranean development).(3) Local planning authorities shall take account of any guidance issued by the Secretary of State in drawing up such a code of practice.(4) If a local planning authority has promulgated such a code, it may make the granting of planning consent for a subterranean development conditional on the developer undertaking to abide by the code or specified elements of it.”

Lord Dubs: My Lords, I hope to be brief, despite the length of the amendments down on the Order Paper. The more I look at this issue—and it is called “subterranean development”, which most people would call “basements”—the more I realise that planning law is incredibly complicated. I spent some time as a councillor in Westminster and, in fact, I was a Minister for Northern Ireland, and I had direct responsibility for planning decisions. Nevertheless, despite all that experience, my knowledge was still pretty thin; I have learned quite a lot, but not as much as I ought to.
Basements are a real problem. Anybody who lives in an area where basements are spreading will accept that they are a problem. If you talk to people who live next door to where a basement is being dug out, they will tell you, “For heaven’s sake, we have no peace, we cannot sleep”. If they are shift workers, they cannot do their work in the daytime. They will say, “For heaven’s sake, stop it”. Addressing this issue has all-party support in both Houses, so it is not a partisan matter at all. Local council leaders are keen on a change in  the law. I spoke to the leader of one London council, who said, “We can’t stop these basements unless you change the law to enable us to do so”. That is the purpose of these amendments.
Even if your Lordships live in an area where there are no basements, they are coming your way—even in Northern Ireland, they will happen sooner or later. But certainly they will happen all over London and in other cities. So it is no good saying, “This does not affect my area”, because it certainly does, or certainly will. One only has to look at the coverage in the Evening Standard. Week after week, there are stories of horrific basements being built. There are different types of basements; nevertheless, the stories are there, and they are pretty awful. My noble friend Lord McKenzie of Luton wanted to be here, but I said I would do a little piece for him. He said that one has to be careful when digging basements. The construction industry is a dangerous industry, and there can be accidents in digging basements and there are important health and safety considerations that ought not to be forgotten. Not long ago, a basement was being excavated under a house in Barnes which simply collapsed, so it is not straightforward. There are quite horrific examples.
I have met with the Minister a couple of times. We have had good discussions, and I found her extremely helpful. I am hoping she will be even more helpful on this occasion and give me some encouragement. If she is, we can move on quickly. I beg to move.

Baroness Williams of Trafford: I thank the noble Lord for the manner in which he has engaged with me and Members of your Lordships’ House in addressing not just the basement development issue, but the associated problems and the misery of people’s lives being disrupted by such developments. He has certainly enlightened me as to some of the problems in London, in particular. The Government are very aware of them now, if they were not previously.
I take this opportunity to tell the noble Lord and your Lordships’ House that in the light of the concerns he has raised on this and many previous occasions, we will commit to carrying out a review of the planning law and regulations relating to basement developments. The noble Lord promised me that I would be splashed all over the Evening Standard for this, so I await his side of the deal—that is a metaphor.
We will publish a call for evidence for the review by the summer this year, and we hope we will receive responses from a range of authorities and stakeholders and, of course, from the noble Lord, Lord Dubs, so we can take on his views and expertise.

Lord Kennedy of Southwark: My Lords, I welcome the Minister’s statement and congratulate my noble friend Lord Dubs, who has been doggedly pursuing this issue for some time now. He produced a Private Member’s Bill and pursued this matter here, and we have a very good conclusion.

Lord Dubs: This is a very happy occasion when we are all in such agreement. I am most grateful to the Minister for what she said and for the commitment  she entered into, which I think is pretty good. Everybody I have spoken to says it is pretty good and that we can move forward with it. I cannot guarantee that the Minister will be a headline in the Evening Standard, but she jolly well ought to be. I beg leave to withdraw the amendment.
Amendment 109 withdrawn.
Amendments 110 to 115 not moved.
Amendment 116 not moved.

Amendment 116A
Moved by Lord True
116A: After Clause 141, insert the following new Clause—“Compensation to businesses expelled from premises to enable conversion from office to residential useAny property owner, developer, or agent, who gives notice to a solvent and active business in order to enable the conversion of office premises to residential use, shall be required to—(a) meet the full costs of the planning authority in advising on and determining such an application;(b) make a contribution to the local planning authority of not less than 20% of the net profit gained from the difference between the office and residential value of the property concerned; and(c) share not less than 50% of the net profit gained from the difference between the office and residential value of the property concerned with any business or businesses expelled from the premises to enable the change of use.”

Lord True: My Lords, at this hour I will seek to be as brief as possible. It was very good to hear another concession from the Front Bench; the gracious way in which our Government have listened to Opposition representations has been striking in the course of the Bill’s proceedings, and I welcome it.
I made a speech in Committee, and there is a good rule in this House that we do not repeat at length arguments made there. I considered that speech to be clear and, without being arrogant, I thought that it was quite compelling. It was Conservative; it was, in my submission, common sense; and it spoke for itself. I am not certain that it has been read as widely in government as I would have liked, but I still have hopes that it might be. It was also, if I may say so, a compassionate speech in terms of conservatism.
The issue I wish to highlight, which does not affect the whole country, is what is happening to small businesses as a result of the order as it is operating. In my borough, we have recently seen a local estate agent ousted by landlords operating under a nominee company which wished to develop the property; the estate agent could not find a suitable high street replacement and is now renting in less suitable premises at more than double the cost. Asset and flood risk management consultants employing 10 in a town centre have been ousted, forced to move to a less favourable site, again with a far higher rent. The winner of our local Best Business award, employing six, has been ousted from premises that were found after three years of searching—it  was an ideal site—by a £180 million West End property company which is pushing out a number of businesses in the mews concerned.
There is a problem and I cannot understand why a Government who believe in small business, endeavour and hard work cannot see that there needs to be a tweak at the edges of the current regime to make sure that we can safeguard these hard-working people. That is all I am hoping to achieve in the context of this debate.
I am grateful for the opportunity to speak, and I understand that there are difficulties with my amendment as it stands. There are understandable fears on the part of the Government that if the amendment were accepted it might apply halfway across the country where it was not justified as it is, I submit, in my area. I am very willing to find a compromise; if that takes time over the next few days, I would be willing to do that and withdraw the amendment. That would be the preferred course. With a will, it should be possible to find a way to preserve the policy which the Government rightly think has been a success in using disused and unwanted offices, and allow it to continue in areas where it is appropriate, while finding a way to stop active businesses being forced out on to the streets.
I have every hope that we can find a way forward. I will not prolong my remarks because, as I say, I spoke on this issue at some length in Committee. Circumstances have not improved since then; they have got worse. I beg to move.

Lord Tope: My Lords, I have added my name to this amendment, as indeed I did in Committee. The noble Lord, Lord True, is quite right: he made an excellent speech then, at some length and with some passion. I know this is an issue about which he rightly feels very strongly.
I am no longer a south London councillor, but I was until two years ago and I know the effect that this policy, which came in under the coalition Government in 2013, has had in my borough, which I think is similar to that in much of London. Like the noble Lord, Lord True, I am not going to repeat everything that I said in Committee. One thing startled me, though: in my borough, the London Borough of Sutton, 62% of the conversions permitted in the two-year period under the permitted development right have happened to offices that were occupied, and the occupiers have been removed. That is serious and damaging for the local economy. I ask why the Government are so keen to pursue this, and I am told that it is because of the drive to provide more homes. That is an ambition that we all support strongly.
I therefore asked my borough—I repeat that I am not a councillor now—for the housing figures. They showed me the figures for housing in the borough for each of the last 10 years, long before the policy came in as well as since. Sadly I do not have the figures with me, but in all of those 10 years, and overall, for permissions granted the borough is, from memory, 132% above the target in the London Plan—in other words, the target set for the council. Possibly more importantly, on housing completions it is still very nearly 130% above target. So this is an authority that  is more than meeting its housing targets—whether or not that is enough is a different debate—and cannot be said to be, nor has it been said to be, failing in that regard. Yet the borough, particularly its employment prospects and the whole nature of its town centre and other district centres, is hit hard by this policy.
The other aspect is the housing being permitted under the permitted development rights. We all want to see more homes being provided, but not just anything. None of the properties provided could be designated as an affordable property. Demands are different in different areas, and the demand in an area like mine is very much for two-bedroom and three-bedroom properties, but virtually all those provided are one-bedroom and not affordable, so not what is actually needed in the area but, frankly, what developers can turn a quick profit on. They are permitted to do that; they are not breaking the law. So I question whether the policy is actually meeting housing demand either.
We all want to see more homes built but not any old homes anywhere; we want the right quality and design of homes, and the homes that people actually need. I suggest that this policy is failing on that front as well. It is not failing everywhere; I know that in some authorities—the Minister said that her former authority was one of them—it is very welcome. That is fine and I have no problem with that. Our issue is that having had this policy in practice for a couple of years now, we can see in reality the effect it is having in large parts of London—and, I expect, in other parts of the country too, although I know less about that.
It really is time for the Government to review and relax this provision. In my view, the amendment from the noble Lord, Lord True, meets that requirement. It is fully in keeping with a localist policy. I am not competent to discuss whatever technical flaws there may or may not be in it, but the amendment’s intent is very clear and it is absolutely right. I am pleased to support it.

Lord Kerslake: My Lords, I have added my name to the other amendment in this group for the simple reason that the intended effect of the policy has not been how it has worked out in practice. If we cast our minds back to when this policy was developed, the economy was still struggling to recover from the impact of the financial crisis and the intention, therefore, was to unlock animal spirits and let the market take its course. There is no doubt that permitted rights has unlocked a series of new developments of housing. However, the intention was for it to address industrial sites or office sites where the prospect of new economic development was unlikely ever to happen but, for whatever reason, the local authority was not recognising that reality and moving on. In that sense, it had its effect. Where it has not done what we anticipated was that there was a policy of exemptions which would prevent particular areas being unduly affected. The City and Westminster formed part of those exemptions, but the area was not drawn widely enough.
Let us move forward to the present. The values that can be achieved through the development of residential housing, particularly in London—and I believe that this is predominantly a London issue—far exceed the  values that can be achieved through economic use such as offices, retail space and so on. Instead of taking sites that will never be used for economic development, we are taking perfectly viable business sites and then forcing them into residential use, often at high values, which is not helping with the immediate housing need, as the noble Lord, Lord Tope, has just described. There are plenty of different ways that this issue can be addressed, but I urge the Minister to look constructively at how this issue can be tackled. It is likely to carry on growing in areas where these values are so different. Its consequence will be to damage the character of those areas and permanently lose economic activity.

Lord Beecham: My Lords, I support Amendment 116B, in the names of the noble Lord, Lord True, my noble friend Lord Kennedy and the noble Lords, Lord Kerslake and Lord Tope. They made a powerful case for dealing with what is potentially a damaging development in many town and city centres and some of the suburban areas as well. I am not so keen on Amendment 116A but I think that the Minister should go back to Amendment 116B. I would urge her to give serious consideration to the suggestion it contains. To adapt an old phrase, I would advise her, “to her own True, be helpful”. It would be wise not to ignore the experience of significant change—and change not for the better—particularly as identified by the noble Lord, Lord Tope, as a result of allowing this kind of development to take place and, indeed, under the legislation, actually facilitating it. So I hope there will be some second thoughts on this.

Baroness Scott of Bybrook: My Lords, I support in principle the Government’s view on this change of use from offices to housing and do so because over the last three years, more than 7,500 much-needed houses have been delivered for this country. However, I have sympathy for my noble friend Lord True’s amendment, not for the same reason as he and many other speakers gave, and certainly not from a London-centric view, because I come from a rural part of the country, but because there needs to be further guidance about this.
The change of use of large office blocks in business parks, which is an issue that is hitting many other local authorities, is unacceptable. To put housing in the middle of a business park does two things. First, it is not suitable for the people who live in those houses; and secondly, it does not help the businesses that are there at the time or help to market any further units for businesses in the future. It just does not work. Quite honestly, local communities, local authorities and anyone else who has anything to do with this think it is crazy that we would even think of people living in a business park or an economic development park.
So, although we have Article 4, it would be useful if the Government made stronger recommendations or produced guidance saying that these are areas where we would not accept a change of use. That would then stop all the bureaucracy and the cost of fighting these things, and it would make it clear to developers that there are places that we will talk to them about and  consider a change of use, but there are certain places that are just not suitable and therefore they should not try to speculate on them. Therefore, I would welcome it if the Minister would look at this matter again and give local authorities stronger guidance so that they could say no and stop speculation.

Lord O'Shaughnessy: My Lords, unfortunately I want to express my concern about these amendments and, in doing so, for the second day in a row on Report will no doubt fail to ingratiate myself with a local authority leader who is a noble friend.
I declare an interest in that I was one of the architects of this policy when I was director of policy for David Cameron in my time at No. 10, so noble Lords will understand that I might be a bit defensive about it.
We had presaged the permitted development policy in the 2010 manifesto, explaining that we would amend the use class orders as part of our plan to deliver more housing. That policy, like so many ideas in the manifesto, was based on the principle of devolution, but a richer view of devolution than is assumed by some, who think that this means only pushing power down to local authorities. To quote directly from the manifesto:
“So we want to pass power down to people—to individuals where we can”.
The permitted development rights brought in initially by the coalition Government are, to me, a classic example of that principle in practice: devolving power to individuals and organisations—in this case, building owners—to use their private property as they see fit and in response to changing market conditions. This kind of transfer of power, which the former Labour Cabinet Minister, David Miliband, once called “double devolution”, is what these amendments would curtail.
Therefore, the underlying principle at stake here is devolution, but it was put to work to solve a very pressing problem, which the noble Lord, Lord Tope, has recognised and which everyone in this House recognises—a chronic shortfall in new-build homes. In 2010, as the coalition Government came to power, there were just over 100,000 housing completions, compared to an annual household formation rate of around 250,000. The housing vacancy rate was around 3%, and much of that was tied up in moves, probate and so on. At the same time, the high-street vacancy rate was 16.5% in 2010, and in the south-east—obviously one of the strongest regional economies—the office vacancy rate was 17%. I repeat: 17% against 3%. In 2010, over 260,000 offices of all shapes and sizes were vacant.
So there was, and indeed had been for many years, a clear imbalance between demand for residential versus office and retail uses. There were many causes for this: population growth and demographic change; changing working habits, such as increased home working; changing demands for office space, including different designs required for computer cabling and air conditioning; and changing shopping patterns, such as the rise of internet shopping. Whatever the reasons, it was clear that the old approach was not working and that change was required, and that was brought in by this policy.
The next question is: has this policy worked? Again, the unequivocal answer is yes. JLL Residential Research estimates that 8,000 prior approvals were secured in the first two years of the policy and that, if implemented, they would have created 60,000 homes. New homes created by change of use rose from 12,500 in 2013-14 to 20,650 in 2014-15. Critically, this has not impacted office development. Much of the talk in this debate has been about London, but in London construction levels for commercial reached a seven-year high in 2015. Therefore, it is not having the negative effect that some people have said.
Moreover, important protections are in place. They are being used and provide local flexibility. There are 33 exempt areas. Local authorities can use Article 4 directions—indeed more than 500 are in place—and any other enlargements or changes would clearly be subject to planning permission.
So it seems to me that the current policy, which would be made permanent in the Bill, provides the right balance between higher levels of development, more homes and more office space, and exemptions where necessary. Unfortunately, what these amendments would do is take us back to the status quo ante, when that imbalance was allowed to emerge. That would be a step backwards that would hinder a necessary and effective new part of the planning system. It would hinder the rights of landowners to respond to market conditions to provide the housing that we need. On that basis, I cannot support these amendments.

Baroness Williams of Trafford: My Lords, I thank the noble Lords who have spoken on both sides of the argument. My noble friend Lord True and the noble Lord, Lord Tope, spoke about safeguarding some of the economic well-being of their areas. My noble friend Lord O’Shaughnessy demonstrated that this has been deeply beneficial to areas such as mine in Trafford, revitalising our local high streets and bringing office buildings back into use where once they stood empty. My noble friend Lady Scott talked about inappropriate use of permitted development rights for things such as building houses in industrial estates. As my noble friend Lord O’Shaughnessy said, we have Article 4 to implement in places where it is simply not appropriate to move from office to residential use.
As I outlined in Committee, the office to residential PDR is making a very important contribution to delivering the 1 million homes that we want by 2021, while making the best use of brownfield sites and reducing the pressure to build on greenfield land. Take-up of the temporary permitted development right has been very high, with more than 6,500 applications since April 2014, demonstrating the demand for such conversions. This has led to over 5,300 permissions for office to residential conversions.
Our data show that in 2014-15 we saw a 65% increase in the number of new homes created through change of use, and the office to residential permitted development right will have helped to deliver around 8,000 new homes. Data from the sector also indicate that the temporary right has delivered much-needed new homes to buy or rent, including in London and the south-east, where we continue to face a housing shortage. The British Council for Offices has estimated  that, nationally, 7,600 dwellings have been delivered since May 2013. Evidence to date shows that the light-touch planning process has resulted in new homes being brought forward. The British Council for Offices notes that some of the developments would be unlikely to have come forward via a planning application and are therefore additional to the number of homes that would otherwise have been delivered.
I will now address the new clause proposed in my noble friend Lord True’s Amendment 116A, and speak first to subsection (c). I understand that the aim behind it is to compensate business tenants where property owners exercise their permitted development rights to change use from office to residential. However, this is not a planning issue.
The amendment is unnecessary as there are already adequate protections for business tenants under the Landlord and Tenant Act 1954. Under the general law, business tenants have security of tenure until their lease expires. On expiration, the tenant has important rights under Part II of the Landlord and Tenant Act 1954 to have a new lease at the market rent, unless he has explicitly opted out of these rights at the beginning of the tenancy. Section 30 of the Act specifies certain circumstances in which the tenant is not entitled to a new tenancy. These include where the landlord is able to demonstrate an intention to undertake substantial works at the premises, which could be where approval is secured under the permitted development right. Under these circumstances, the tenant would be entitled to compensation from the landlord under Section 37 of the Act. The compensation is set at the rate of one times the rateable value of the premises, or twice the rateable value if the same business has been in occupation for more than 14 years.
I now turn to subsections (a) and (b). We consider that the introduction of the PDR for change of use from office to residential has resulted in new homes that would not have been brought forward under a planning permission. We consider that imposing such additional requirements on developers is likely to undermine the contribution the right makes to the delivery of new homes which are so badly needed.
In relation to subsection (a) of the proposed new clause, local authorities are already able to charge a fee for prior approval applications for change of use. The fee is set at a level which reflects the light-touch approach for processing these applications, as only certain specific issues require approval. I hope that this provides reassurance that appropriate safeguards are already in place and I invite my noble friend to withdraw the amendment.
On Amendment 116B, as I agreed in Committee, I have since met my noble friend Lord True and the noble Lord, Lord Tope, to discuss their concerns about the impact of the office-to-residential right. I have also listened carefully to the debates both in Committee and on Report on this issue and recognise the concerns expressed by my noble friend and the noble Lords, Lord Kennedy and Lord Kerslake, about the loss of office space in some areas and the impact that it can have on local businesses.
I appreciate the strength of feeling in certain areas on this matter, but I cannot accept the amendment that would introduce this new clause into the Bill. The issues raised relate to specific areas, as I have already outlined. The amendment would apply nationally and would create uncertainty within the market. It would undermine the important role that the right plays in the supply of new homes. It would also have a negative effect on the growth of the development industry. The amendment is also unnecessary, as appropriate protections are already in place to meet local conditions.
The office market continues to evolve to meet the business community’s needs and respond to the right. Where it is necessary to protect the economic well-being of a specific area, local authorities can bring forward an Article 4 direction to remove the right and allow for consideration of a planning application. That is a fair and proportionate approach. But I recognise that my noble friend Lord True also has concerns about Article 4 directions. However, the process is straightforward and provides robust safeguards by allowing for local consultation on the scope of the direction before it comes into force.
I hope that this reassures noble Lords that while we understand their concerns about the impact of the right in specific parts of the country, there are appropriate existing safeguards. But while the Government’s position on this issue will not change and while I urge my noble friend not to press his amendment, I will undertake if he wishes to have further discussions on this matter. As always, I am very happy to meet him.

Lord Kennedy of Southwark: On Amendment 116A, we see these developments all around here in Westminster, with offices now being converted into very expensive homes. Why would it not be right for a planning authority to get somewhere near its full costs on this?

Baroness Williams of Trafford: My Lords, I am sorry. Could the noble Lord repeat that?

Lord Kennedy of Southwark: On Amendment 116A(a), we can see all around here many developments where offices have been converted into very expensive properties. Why it would it not be reasonable for a local authority—in this case, Westminster—to cover a larger proportion of its costs in fees, considering what these properties are now selling for very close to this Palace?

Baroness Williams of Trafford: My Lords, I think that it is because it is not a planning consideration, so the tenant would be entitled to compensation from the landlord rather than the local authority.

Lord True: My Lords, I am grateful to those who have spoken, including my noble friend. It is important to understand—perhaps I should say this twice, because it needs to be understood—that I am not seeking to defeat the whole order; that is a separate matter. My amendment refers to a small part of the order relating to office to residential. I am not seeking an untrammelled power; I am seeking an audience in Parliament for people who are suffering adversely from the way in which the policy operates. My amendment states that the local authority can seek to opt out only if it demonstrates,
“that active businesses within its area are being expelled from office space”—
businesses thrown out under this Administration—
“to enable conversion to residential use”;
that is to say, “When the lease terminates, go: we are turning this into a home”; or the local authority must show that there is economic damage.
I am extremely grateful for what my noble friend said. I am not ideological about this. I am seeking a practical solution for local needs, not an overall position. Of course, I am prepared to have further discussions to see if we can find a way. It need not be my way and this amendment. I am not arrogant enough to demand that. I can see the defects. I understand the Government’s concerns about the order. But I ask for a degree of compassion and understanding.
I mentioned some examples and I will not go on with the list, but there is a fast-expanding consultancy with six employees that was ousted from central Twickenham to a fringe location with a higher rent; there were relocation costs of almost £1,000 and a loss of parking. That should not be happening. In an intelligent country and with the wisdom there is in the Government—exemplified by my noble friend—we must be able to find a way between now and Third Reading to take both tricks. That would allow the Government to keep the overall order and enable it to operate, and find a way of protecting these small businesses that are suffering. I am grateful for the offer from my noble friend to meet.
I was obviously disappointed by my noble friend Lord O’Shaughnessy. I understand that he is the author of the policy. I had not realised that, but it does not affect my estimation of him. It is too late at night to be bitchy and I did not intend to be; but for good policy-making you sometimes have to trim your sail after a bit of time. You do not always have to cling to the ideological principle you had at the start. It is a good principle and I agree with him on the principle of getting homes that way, but can we not just trim the sail? Ideology and policy must at times meet real life. In parts of London, as we have heard this evening, it is clashing with real life and we must find a way forward. Given what my noble friend said, I still travel in hope that we might find a way of squaring the circle. Therefore, I beg leave to withdraw the amendment.
Amendment 116A withdrawn.
Amendment 116B not moved.

Amendment 116BA
Moved by Lord Kennedy of Southwark
116BA: After Clause 141, insert the following new Clause—“Local authorities and development control services(1) A local planning authority may set a charging regime in relation to their development control services to allow for the cost of providing the development control service to be recouped.(2) Any such charging regime must be subject to consultation prior to implementation.”

Lord Kennedy of Southwark: My Lords, this amendment covers the issues previously discussed under Amendment 108. It enables local authorities to recover up to the full costs and no more in determining planning applications. Noble Lords who were not persuaded by Amendment 108 could give this amendment some further consideration, as it proposes not to go beyond full cost recovery.
My amendment would allow a more realistic fee level to be recovered from large-scale developments and differentiates between that and someone who wants to build an extension to their home, for example. I grew up in Southwark and in the north of the borough we have seen a boom in large-scale developments in recent years. A more realistic fee level would have made no difference to those developments. I now live in Lewisham and, again, we are seeing a large number of residential developments in Lewisham, Deptford, Catford and elsewhere in the borough. Again, I do not believe that a more realistic fee level would have made any difference whatever to the viability of those developments.
In responding to this short debate, I ask the Minister to address the point made during the debate on Amendment 108. I know we will come to this issue when we discuss further amendments on Monday, but I am worried that we could get a two-tier system whereby other providers are able to provide planning advice. I do not want a private provider to be able to charge a much larger fee, and a local authority to be limited as to what it can charge to do the same work. That would be totally wrong, and it would be very helpful if the noble Baroness assured us that that is not the case. It would be a very unfair situation for local authorities and completely wrong. With that, I beg to move.

Baroness Andrews: My Lords, we had a very good and thorough discussion on the recovery of full-cost fees on a previous amendment. I want to draw attention to a few statistics to reinforce the case that my noble friend made and to point out that the flaw in the present system is that you cannot get speedy, authoritative and consistent decision-making at local planning level if the expert workforce is being run down and starved of resources. I have just a few statistics that pick that up.
The audit committee reported in 2014 that planning departments were taking the brunt of funding cuts—a reduction, in real terms, of 46% across the planning and development budget between 2010 and 2014. These are horrendous figures in the context of cuts of 37% in local authorities as a whole. How much deeper have these cuts been since 2014? In expert areas such as archaeology and conservation officers, there has been a drop of a third in local authority staff. In Lancashire the entire archaeological team has disappeared. How the Government expect local authorities to deliver a speedy, efficient and good planning service with this level of cuts is absolutely beyond me. Therefore, the only answer to building the capacity of local authorities to do what the Government so desperately want them to do, and to deliver a speedier, more efficient planning system, is to build the capacity of local authorities themselves, because development control is the  fundamental business of planning authorities. There is an urgent need to reinvest in local authority planning services. Full-cost fee recovery can contribute to that.
I have one question for the Minister. In the previous exchange, I was not quite sure whether she believed the figure published by the Local Government Association—that there is a shortfall of £450 million to local authorities because of the difference between the cost they have to pay and the fees they receive. She talked at great length about the vitality needed to enable local authorities to do their job, but she did not address the question of the reality of what is happening on the ground. There is an absolute, logical and fair case for recovering full-cost fees, and I hope she will respond positively to it.

Lord Porter of Spalding: My Lords, I speak in favour of the spirit of what the amendment is trying to achieve, but against it because of the way it is worded. No one from a local government background would believe that it is right that we are unable to collect enough fees to cover the cost of the service, and it is not right that local taxpayers are subsidising the development industry to the tune of about £150 million a year—£450 million over the last three years. But the amendment as worded could have a quite negative impact on some areas. If a fully staffed planning team received only 10 planning applications in a year, the brunt of those costs would fall on those 10 applicants. That cannot be right. There needs to be a way for central government to get away from setting fees at an inflationary uplift. As welcome as that will be, it will be insufficient to get anywhere near cost recovery.
Given that the Government propose to put private sector competition into the space of a public sector monopoly, there must be a way to increase fees that works for local government, the local taxpayer and the private sector. I still do not understand why we are dealing with these amendments separately from the amendment that opens the door for the private sector to compete. At that point the Government will be sure that the fees local government charge are proportionate for the service being delivered in their area, because if local government charges too much, clearly, the private sector will take all the work. We need to find a way of getting that done but, from my end of the telescope, this amendment still does not deliver what needs to be done. I would love to able to support somebody who is clever at writing an amendment in a way that I am not.
Again, the word “must” has been used for local government. People should not put “must” in anything. Local government likes “may”, not “must”.

Lord Kennedy of Southwark: Before the noble Lord sits down, I did put “may” in for the main part and then “must” for the consultation. I thought I was getting somewhere with the noble Lord. I think we should talk outside the Chamber—he may well be the right person to write this.

Lord Porter of Spalding: You should never have me write anything, because you will not be able to read it.

Baroness Williams of Trafford: I thank noble Lords for their comments and contributions. To respond to the noble Lord, I can confirm absolutely, for the avoidance of doubt, that planning authorities will not be able to charge one fee and private providers another. We do not intend to create two tiers within the planning system—it would be most undemocratic and unfair, generally.
The noble Baroness, Lady Andrews, asked about the £450 million disparity that the LGA found between costs and fees. I need to make the point that there will be differences between the efficiency and effectiveness of local authorities in delivering planning services. Some show that performance can be improved and costs reduced, and more should follow their lead. Authorities have done a phenomenal job in sharing services for many of their functions but have not moved quickly enough in doing so for planning services. I said that to the noble Baroness either earlier today or on Monday—the days have merged into one.
Amendment 116BA, as I said on a previous amendment, allows local authorities to go beyond cost recovery. We are absolutely clear that these services and other discretionary services should not exceed the cost of providing the service. I have been through the argument previously that what cost recovery means in practice, in terms of fee levels, varies from local authority to local authority. We want a highly efficient service, and there are real challenges up-front in doing this for some local authorities, but we want better-performing planning departments for better performance in terms of planning outcomes. I talked earlier about our proposals for tackling resource pressures in planning departments. I hope that noble Lords will not mind that I do not go through these again, and that with those words the noble Lord will feel able to withdraw the amendment.

Lord Kennedy of Southwark: My Lords, I thank all noble Lords for speaking in this short debate. My noble friend Lady Andrews highlighted the cuts that have fallen on local authority planning departments in recent years. I was pleased that the Minister was able to give us some reassurance on the issues. I am sure we will be discussing again on Monday the fees that can be charged by a local planning authority and those that can be charged by a private provider. That will be very welcome news for local government.
I thought I had written my amendment in such a way that it would not allow people to charge more than the costs involved, so clearly I am no better than the noble Lord, Lord Porter, at writing these amendments. Maybe we need to get together and we will get one right at some point. I certainly do not see my amendment as doing what the Minister says it does, so I am a bit disappointed in her response. I know it is late but I am going to test the opinion of the House.

Clause 142: Resolution of disputes about planning obligations

Amendment 116C
Moved by Lord True
116C: Clause 142, leave out Clause 142

Lord True: My Lords, the hour is late and I should make it clear that I have never had any intention of pushing this amendment to a Division. The reason that I bring it before your Lordships is that this clause is effectively a proposal to set up a new quango. I welcomed the meeting that I had with officials earlier, and I was grateful to Ministers for facilitating it. I was told that it will probably not be formally a quango but a new, independent body to be served by people as yet unspecified. It will have a series of functions as set out in part over several pages of Schedule 13, which might have been drafted—it is a bit late, so I am perhaps a bit free with my words—as in that famous scene with Groucho Marx and the contract and “the party of the first part”. There is a whole mass of regulatory powers, with prescribed persons not defined and circumstances which the Secretary of State will determine later.
This clause was introduced to Parliament in the other place on Report, after midnight and with a 185-word introduction by the Minister. There was no debate on the subject and the technical consultation that went out really answered no questions at all. Theoretically, I believe in arbitration, but to set up a statutory process of compulsory arbitration without defining particularly what you are about is risky. I would much prefer to have seen this properly scoped and perhaps included in subsequent legislation, if there were some. What is this new body? Who will staff it? Where will it be based and what will its budget be? Quangos and their functions are never cheap.
Statutory arbitrators will be sent in at the request of unspecified third persons—in some circumstances, not even the two parties to the dispute. We do not really know who those third persons are yet, although the Government are asking who they might be. Will they be interested local people? The new body can charge fees. Well, any government body likes to charge fees and we can be sure that the fees will not be cheap—and it will probably expand.
I do not want to labour the issue but I did raise it in Committee. While I do not criticise my noble friend on the Front Bench—she has done an absolutely fantastic job on the Bill in my submission—it was in a large group so there was no real response on what it was all about. As I said, 185 words were spoken in the Commons, and there was no response.
What is the calculated impact on affordable home provision? What local knowledge will these statutory arbitrators require? What will be their qualifications? How will they relate to the existing inspectorate, which is supposed to resolve difficulties between local authorities and developers? Will their decisions be judicially reviewable? Any statutory body lets the lawyers loose.
If she can, I should like my noble friend to say at what stage those questions will be answered for Parliament,  because I am concerned that, well-intentioned though this might be, we risk creating a statutory body that will run out of control, cost more and lead to more delay in the system rather than less. Will the public be able to make representations to these arbitrators? Will they meet in open session? If so, what role is there for the planning committee? Where do we go with appeal afterwards? We could have a three-stage process.
I beseech my noble friend and her colleagues to think about what this new statutory body might be. They might even know what it might be called.

Lord Shipley: My Lords, I speak in support of the amendment of the noble Lord, Lord True, who asked a set of important questions. I shall not repeat them, and I am pleased that a large number of Members of the House are here to hear him ask them. This is an example of the creation of a bureaucracy that may not solve a significant set of problems. In other words, because there may have been some difficulties in a limited number of cases in some places, we may set up a large bureaucratic structure to solve them.
I have read the impact assessment and the Bill very carefully, but I am still at a loss to understand what problem the Government are trying to solve. It may in some cases speed up some Section 106 negotiations but, in the main, I am not sure that it will. It may create a set of unintended consequences. When I read line 1 of the impact assessment—
“The Government wishes to provide for someone to be appointed to help resolve, within a set timescale, outstanding issues about planning obligations relating to individual planning applications”—
I immediately wonder who the “someone” will be. How will you ensure that they do not have some kind of interest? How will you know that there is a firewall between that person and their conclusions? For example, the impact assessment does not answer the question asked by the noble Lord, Lord True: what might the impact be on starter homes? That is a very important question, because the funding of starter homes comes from reductions in the amount of Section 106 money received by local authorities.
On page 167, at lines 10 to 12, the Bill states:
“The local planning authority must not refuse the application on a ground that relates to the appropriateness of the terms of the section 106 instrument”.
I understand that statement in one sense, but at the heart of our debate about starter homes is the fact that Section 106 provision will be reduced to help to provide the developer subsidy for those starter homes. There are major implications in this, and I see more potential problems over Section 106 negotiations. I am not convinced that setting up the kind of bureaucratic structure that the noble Lord, Lord True, described, will actually help us to solve that problem. It will be solved if local planning authorities are properly resourced, have the proper powers and there is a proper context within which they are to work to build the homes that the country needs.

Lord Beecham: My Lords, I wholeheartedly endorse the critiques of the proposal by the noble Lords, Lord True and Lord Shipley. Several real problems have already been identified, but it is worth reminding ourselves that this is yet another incursion on the rights and roles of local authorities, imposing an  external component on to the resolution of what ought to be determined locally between the local authority and the applicant. Moreover, the whole thing is another bureaucratic nightmare. There are five pages of the schedule. The Explanatory Notes make it clear that there are also to be regulations—surprise, surprise, once again made by the Secretary of State. They say:
“The Secretary of State can also make regulations setting out … who, other than the local planning authority and applicant, could make a request for the appointment of a person”.
So it need not even be the planning authority or the applicant who makes that application. Who else might make it is presumably at large—anybody could. The regulations can also deal with,
“the timing and form of requests”,
and,
“that a person can be appointed if outstanding issues have not been resolved within set timeframes”,
as well as,
“further detail about appointments … what qualifications or experience the appointed person must have”,
and “fees payable”. Those will all be determined by regulations.
The Explanatory Notes say:
“The appointed person must take into account any template or model terms published by the Secretary of State. Regulations can also set out other details … Regulations can also set out restrictions on the local planning authority’s ability to ask for additional obligations”,
as well as,
“periods for determining planning applications after a report is issued;
circumstances or cases where the consequences in this Schedule don’t apply; and
any further steps required to be taken by the appointed person”.
Once again, we are going to have myriad regulations, the sight of which is withheld from us, presumably because they have not yet been drafted. They will be produced at a later date, again without any prior consideration by Parliament at the time when the Bill has gone through. There is also the possible perverse effect that, given that applicants may have, as they perceive it, difficulties with the local authority, why should they not seek the involvement of the appointed person—not so much by way of an appeal but in the initial part of the process? They could delay things even more. If they thought that they were not going to get entirely what they wanted from their application, why not go through this process? That unintended effect seems to me a ridiculous proposition, and I very much hope that the noble Lord will test the opinion of the House—and, if he does not, I will.

Baroness Williams of Trafford: My Lords, I thank noble Lords for contributing to the debate and raising some very valid questions about how the process will work. Dispute resolution is part of the wider measures that the Government are introducing to make the planning system simpler and encourage housebuilding. We anticipate that it would be used only for a small number of applications, as a last resort, and that its existence will encourage all parties to work constructively together and agree planning obligations earlier in the  planning process. Only 7% of major and 1% of minor planning applications both include a Section 106 agreement and are decided outside the statutory time frameworks or agreed extension. The objective of dispute resolution is to avoid protracted Section 106 negotiation, not to add unnecessary steps.
I have listened to the debate in Committee and this evening, and recognise that several noble Lords have valid concerns about how it will all work while, I think, supporting the general principle of arbitration. A key concern of my noble friend Lord True is not only the bureaucracy but the complexity of negotiations. However, the schedule has been drafted this way to encourage the parties to agree matters between themselves wherever possible. For example, taking out the cooling-off period would detract from the objective of speeding up negotiations. This process would be used only in cases where the local planning authority would be likely to grant planning permission were it not for unresolved issues relating to Section 106 obligations.
The legislation is also intended to be flexible enough to respond to feedback from the Government’s technical consultation, which has recently closed. In this consultation we sought views from the sector on, among other things, the cost of the process, the matters that should be taken into account in dispute resolution and the necessary qualifications of the person to resolve the disputes. These matters will be set out in regulations, as the noble Lord said, and I acknowledge the expertise of my noble friend Lord True as leader of the London Borough of Richmond upon Thames. I would therefore welcome ongoing dialogue as we develop the regulations.
I reiterate that dispute resolution is intended to be activated by parties to the Section 106 agreement. It therefore should be seen as a tool to aid negotiations where necessary rather than as placing an additional burden. The Government are committed to doing whatever they can to unlock stalled sites and to increase the delivery of housing. We have just concluded a wide-ranging consultation which will inform the detail of how it will be applied through regulations. I hope—although I doubt—that I have been able to provide additional reassurance, and that noble Lords will not divide the House on this.

Lord True: My Lords, I thank my noble friend for that answer. I repeat what I said at the outset: that I have no intention of dividing the House, although I cannot speak for others or for the reasons that they might wish to do so.
There is a danger of legislation drafted by bureaucrats about bureaucracy for bureaucratic solutions. Sometimes Ministers have a very useful word in their vocabulary, which is “no”. I hope that, as the deliberations on this very cumbersome-looking new body go forward, Ministers will whip out that word quite often. I am grateful for what my noble friend said. It is the first time that a Minister at the Dispatch Box in the course of the Bill has really set out some of the details—although my honourable friend Mr Lewis said 185 words on them—and I thank her for that. I beg leave to withdraw the amendment and I hope that, on reflection, the noble Lord, Lord Beecham, will not press the House to divide at this hour.

Baroness Stedman-Scott: Is it your Lordships’ pleasure that this amendment be withdrawn?
No.

Schedule 13: Resolution of disputes about planning obligations: Schedule to be inserted in the Town and Country Planning Act 1990
  

Amendment 117A not moved.
Consideration on Report adjourned.

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